In the opinion of the currency strategists at UOB Group, the next relevant hurdle for GBP / USD is at 1.4100.
Key Comments:
24 hour view: “Yesterday we highlighted that ‘there is room for the GBP / USD advance to first test 1.3865 before falling back.’ Instead of ‘test 1.3865, the pair broke above this level and spiked to 1.3993. While clearly overbought, there is room. for GBP / USD to move above last month’s peak near 1.4020. For today, the next big 1.4100 is not expected to enter the scene. Support is at 1.3955 followed by 1.3920 “.
Next 1-3 weeks: “Yesterday (April 19, GBP / USD at 1.3825) we noted that ‘the advance of the British pound has covered considerable ground but could further strengthen to 1.3890’. Strengthen is correct, the sudden move that caused the pair to skyrocket to 1.3993 was a surprise. Keep in mind that GBP / USD gained + 1.01% yesterday, its biggest 1-day advance since mid-January. The rise seems to be a bit of a stretch, but it still doesn’t show any signs of weakening. In other words, GBP / USD could continue to advance even though the next big resistance at 1.4100 may not come so soon. On the downside, a breakout 1.3850 (the ‘strong support’ level was at 1.3750 yesterday) would indicate that the current strength of the British pound has come to an end. On a short-term note, 1.3920 is already a strong support level. “
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