It is anticipated that the GBP / USD extend the rally as it rises above the 1.3365 level in the short termhave suggested currency strategists at the UOB Group.
Key Comments:
24 hour view: “Last Friday, we highlighted that ‘the upward pressure has more or less dissipated’ and we expected GBP / USD to ‘trade within a range of 1.3315 / 1.3390’. The pair subsequently fell to a low of 1.3284 before recovering. quickly (high was 1.3381). The bounce has room to extend higher, but any rally is likely to be limited to a test of 1.3365. Major resistance at 1.3400 is unlikely to be threatened. Support is at 1.3300 followed by 1.3280 “.
Next 1-3 weeks: “We have had a positive outlook on GBP / USD for over 2 weeks. Our latest explanation was from last Thursday (Nov 26, GBP / USD at 1.3385) in which ‘a breakout of 1.3400 would shift focus towards the yearly high at 1.3481’. Subsequently, the pair touched 1.3399 before falling to a low of 1.3284 last Friday (Nov 27). While our ‘strong support’ level at 1.3280 is still intact, the bullish momentum has diminished and the odds of further strength for the British pound have diminished. To revive the weakened momentum, the GBP / USD has to move and stay above 1.3365 within this 1-2 days or a breakout of 1.3280 would not be surprising and would indicate that the positive phase in the pair is over. “
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