Prospects for further gains for GBP / USD remain above 1.3365 in the short term, suggest currency strategists at UOB Group.
Key Comments:
24 hour view: “Yesterday, we held the view that ‘the rebound in the British pound has room to extend higher but any advance is likely to be limited to a test of 1.3365’. We indicated that ‘main resistance at 1.3400 is unlikely to be See threatened. ” Subsequently, GBP / USD rose to a high of 1.3388 before falling rapidly again. The churning price action has resulted in a mixed outlook and for today the GBP / USD could move between the two levels. main 1.3300 and 1.3400 “.
Next 1-3 weeks: “We have had a positive outlook on GBP / USD for over 2 weeks. Our latest narrative was from last Thursday (Nov 26, GBP / USD at 1.3385) in which ‘a breakout of 1.3400 would shift focus to 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 GBP / USD strength have diminished. To revive the weakened momentum, the pair has to move and sustain above 1.3365 within these 1-2 days or a breakout of 1.3280 would not be surprising and would indicate that the positive phase in GBP / USD is over. “
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