Forex strategists in UOB Group point out that we are likely to see more gains in the GBP/USD above the 1.3600 mark.
24-hour perspective: “We highlighted yesterday that the pound could break above 1.3560 before the risk of a pullback increased. And we added that the next resistance at 1.3600 was unlikely to be threatened. The subsequent strength of the GBP exceeded our expectations as it rose to a pip of 1.3600 (high at 1.3599) before falling sharply The sharp decline coupled with overbought conditions indicate that the UK currency is likely to consolidate today, expected to is within a range of 1.3525 / 1.3595.”
Next 1-3 weeks: “On Tuesday (Jan 4, pair at 1.3480), we highlighted that the pound was likely to trade between 1.3370 and 1.3560. Yesterday, we indicated that if the pound closed above the main resistance at 1.3560, it suggested that it was likely to advance towards 1.3600 and beyond. Thereafter, the GBP rose to 1.3599 before retreating to close at 1.3556. Upside momentum has improved, although not greatly. From here, it appears that the pound has to break above 1.3600 before further advance is likely. The probability of it breaking 1.3600 is not high for now, but it would remain intact as long as the currency does not move below 1.3460 in these few days. Looking ahead, the next resistance above 1.3600 is at 1.3630.”
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