In the opinion of the currency strategists at UOB Group, Prospects for GBP / USD to dip below 1.3760 appear to be diminishing for the moment.
Key Comments:
24 hour view: “We highlighted yesterday that ‘the rebound seems to be ahead of itself, it seems unlikely that the GBP / USD will strengthen further’ and we expected the pair to ‘move between 1.3700 and 1.3780’. Our opinion was not wrong even though the GBP / USD was moving within a slightly narrower than expected range (1.3697 / 1.3770). The underlying tone has improved a bit and this could lead to GBP / USD rising despite the unlikely major resistance at 1.3810 is threatened (there is another resistance at 1.3780). Support is at 1.3725 followed by 1.3695 “.
Next 1-3 weeks: “Yesterday (Apr 12, GBP / USD at 1.3705), we noted that ‘bearish momentum has not improved much but a clear break out of 1.3670 is not ruled out.’ We add, ‘any further weakness is expected to have a difficult time moving through. below the next support at 1.3640. ‘Subsequently, GBP / USD fell to 1.3670 before rebounding strongly to 1.3776. While our’ strong resistance ‘level at 1.3780 remains intact, the bearish momentum has faded and the outlook for a The breakout of 1.3670 has eased. For now, GBP / USD is more likely to trade between 1.3670 and 1.3810. “
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