GBP/USD: Further gains need to surpass 1.3600 – UOB

In opinion of FX Strategists at UOB Group, GBP/USD targets 1.3630/60 on a break above the 1.3600 mark.

Key Quotes

24-hour view: “We expected GBP to ‘consolidate and trade within a range of 1.3485/1.3570’ last Friday. However, GBP soared to a high of 1.3598. Upward momentum has improved, albeit not by all that much. For today, GBP is likely to move above 1.3600 but the next major resistance at 1.3630 is unlikely to come into the picture. Support is at 1.3570 followed by 1.3550.”

Next 1-3 weeks: “In our latest narrative from last Thursday (06 Jan, spot at 1.3555), we highlighted that ‘upward momentum has improved slightly but GBP has to break 1.3600 before further advance is likely’. We added, ‘the chance for GBP to break 1.3600 is not high for now but would remain intact as long as GBP does not move below 1.3460’. GBP rose strongly last Friday and came close to breaking 1.3600 (high of 1.3598). Upward momentum has built up further and a break of 1.3600 would indicate that GBP could advance to 1.3630, possibly 1.3660. Only a breach of the ‘strong support’ at 1.3525 (level was at 1.3460 last Friday) would indicate that the build-up in momentum has fizzled out.”