GBP / USD is expected to enter a consolidation phase in the coming weeks, as noted by currency strategists at UOB Group.
24 hour view: “We highlighted yesterday that ‘there is room for GBP / USD to advance to 1.3695 and possibly 1.3715’. The subsequent advance exceeded our expectations as GBP / USD rose to 1.3734. However, the pair retreated sharply from the high. The pullback has room to spread, but any weakness is likely to be limited to a test of 1.3645. Strong support at 1.3595 is not expected to enter the scene. Resistance is at 1.3695, followed by 1.3715. “
Next 1-3 weeks: “We highlighted yesterday that ‘GBP / USD is likely to rise to 1.3715’. And we added that ‘a breakout of 1.3715 would shift focus to 1.3750’. We weren’t quite expecting how quickly GBP / USD moved above 1.3715 as it jumped to 1.3734 during the London session hours before retreating. There is no change in our view for now, but GBP / USD could consolidate for a couple of days first before heading higher. Just a breakout of the ‘strong support’ at 1.3595 (no change in level) would indicate that 1.3750 is out of reach. “