The rise in par GBP / USD will continue to gain ground in the coming weeks, as suggested by the currency strategists at UOB Group.
Key Comments:
24 hour view: “While we expected GBP / USD to strengthen yesterday, we are of the opinion that ‘1.3900 is not expected to enter the scene.’ However, the British pound rose above 1.3900 during the US session (1.3913 high) before settling with strong tone at 1.3908 (+ 0.60%). Strong bullish momentum is likely to lead to further strength of the British pound towards 1.3950. Main resistance at 1.4000 is not expected to be threatened. On the downside, a breakout 1.3855 (the minor support is at 1.3875) would indicate that the current upward pressure has eased ”.
Next 1-3 weeks: “Yesterday (Apr 5, GBP / USD at 1.3825) we observed that the British pound ‘is in a consolidation phase and is expected to trade between 1.3700 and 1.3900’. We do not anticipate the sudden increase in momentum that sent GBP / USD to 1.3913 and the subsequent strong daily close at 1.3908 (+ 0.60%). There is scope for the British pound to strengthen further, but 1.4000 is solid resistance and the odds of a sustained rise above this level are not high. Overall, GBP / USD is expected to move on a positive bias as long as it does not pull back below 1.3820 in these few days. “
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