GBP/USD: Scope for a move to 1.3325 near term – UOB

Further upside momentum could push GBP/USD back above the 1.3300 mark in the next weeks, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “Yesterday, we expected GBP to ‘trade sideways within a range of 1.3120/1.3220’. GBP subsequently dipped to 1.3121 before staging a surprising strong rally that not only took out the top of the expected range at 1.3220 but also another strong resistance at 1.3260 (high has been 1.3274). The rally has room to extend but overbought conditions suggest that the major resistance at 1.3325 is likely out of reach for now (minor resistance is at 1.3300). On the downside, a breach of 1.3210 (minor support at 1.3235) would indicate that the current upward pressure has eased.”

Next 1-3 weeks: “We turned positive on GBP last Thursday (17 Mar, spot at 1.3150) where we indicated that the rebound in GBP could extend to 1.3320. As GBP strengthen, in our latest narrative from yesterday (22 Mar, spot at 1.3160), we indicated that there is room for GBP to move above 1.3220. We added, “any further advance is expected to face solid resistance at 1.3260”. GBP subsequently dipped to 1.3221 before rallying past both 1.3220 and 1.3260 (high of 1.3274). The strong boost in momentum is likely lead to further GBP strength to 1.3325, possibly 1.3365. The upside risk is intact as long as GBP does not move below the ‘strong support’ at 1.3160 (level was at 1.3090 yesterday).”