Ella 
We highlighted last Friday that GBP “is likely to continue to weaken”. We also highlighted that “significant oversold conditions suggest that a sustained move below 1.2355 is unlikely.” GBP fell less than expected, falling to 1.2380 before closing at 1.2383 (-0.23%). The pound is still oversold, but with no signs of stabilization yet, the pound could fall to 1.2355 before the risk of a more sustained rebound increases, but the chances of hitting the important support of 1.2305 are low. Resistance is at 1.2420, followed by 1.2445.
Next 1-3 weeks: Our update from last Friday (September 15, spot price 1.2405) still stands. As highlighted, the decline in sterling that began two weeks ago has yet to stabilize and sterling is likely to continue to weaken. The next level to watch is the May low near 1.2305. On the upside, a break above the “strong resistance” level of 1.2485 (unchanged from last Friday) means that the pound will not hit 1.2305 this time.
