Ella 
24-hour view: Our view yesterday that GBP would trade in a range was incorrect. Instead of trading in a range, GBP plummeted to a low of 1.2680. While severely oversold, GBP appears to have enough momentum to break below 1.2680. Key support at 1.2680 may not be touched today. To maintain momentum, the pair must stay below 1.2795 (minor resistance at 1.2755).
Next 1-3 weeks: Last Friday (July 28th, spot at 1.2800), we noted that “while GBP’s decline has gained momentum again, it remains to be seen whether it can break the key support level at 1.2720. GBP fell to 1.2742 After rebounding, we emphasized yesterday: “Although the downward momentum has not strengthened significantly, the pound may still fall to 1.2720. GBP could weaken further after breaking the fairly solid support level of 1.2720. The next target is 1.2640, then another fairly solid support at 1.2580. As long as GBP remains below 1.2830 (“strong resistance” at 1.2880), downside risks remain unchanged.
