GBP / USD faces strong resistance at 1.3380 / 1.3420

It is expected that further rise in GBP / USD hits a relevant hurdle at 1.3380 ahead of 1.3420, have noted the currency strategists of UOB Group.

Key Comments:

24 hour view: “Our expectation that GBP / USD would trade between 1.3120 and 1.3220 was incorrect, as it passed 1.3220 and reached a high of 1.3278. While the rapid advance appears to be ahead of itself, the strong bullish momentum suggests that GBP / USD could further strengthen to 1.3300, less likely to extend to 1.3330. On the downside, a breakout of 1.3190 (minor support is at 1.3220) would indicate that the current bullish pressure has subsided ”.

Next 1-3 weeks: “We have held the same view since last Friday (Nov 6, GBP / USD at 1.3130) in which ‘the bullish momentum has improved, but GBP / USD has to move and stay above the main resistance at 1.3200 before that further sustained progress can be expected. ‘ After GBP / USD retraced from a high of 1.3207, yesterday (Nov 10) we highlighted that ‘another attempt to move clearly above 1.3200 is not yet ruled out and only a break of 1.3065 would indicate that the current upward pressure has eased. ‘. Subsequently, GBP / USD spiked to a high of 1.3278 before closing on a firm tone at 1.3276 (+ 0.87%). Further strength in the British pound seems likely, although it is too early to expect a move towards the yearly high at 1.3481. On a short-term note, 1.3380 and 1.3420 are already quite strong resistance levels. All in all, the current strength of GBP / USD is considered intact as long as it does not move below 1.3120 (the ‘strong support’ level was at 1.3065 yesterday). ”