GBP/USD: Diminishing bets for a breakout of 1.3300 – UOB

Prospects for GBP/USD to break above the 1.3300 barrier seem to have lost momentum as of late according to FX Strategists at UOB Group.

Key Quotes

24-hour view: “We expected GBP to strengthen yesterday but we were of the view that ‘the major resistance at 1.3325 is likely out of reach’. We highlighted that ‘there is a minor resistance at 1.3300’. GBP subsequently rose to 1.3299 before staging a surprisingly sharp and swift sell-off (low has been 1.3175). The rapid decline appears to be overdone and GBP is unlikely to weaken much further. For today, GBP is more likely to trade between 1.3160 and 1.3260.”

Next 1-3 weeks: “Yesterday (23 Mar, spot at 1.3265), we highlighted strong boost in momentum is likely to lead to further GBP strength to 1.3325, possibly 1.3365. GBP subsequently rose to 1.3299 before dropping sharply to a low of 1.3175. While our ‘strong support’ level at 1.3160 is not breached, the rapid loss in momentum has diminished the odds for GBP to advance to 1.3325. In order to rejuvenate the flagging momentum, GBP has to move and stay above 1.3260 or a break of 1.3160 would not be surprising. Looking ahead, a break of 1.3160 would indicate that the GBP strength that started late last week has run its course.”