GBP / USD negative phase remains unchanged as long as it is below the 1.3810 level, suggest currency strategists at UOB Group.
Key Comments:
24 hour view: “Yesterday, we highlighted that ‘there is room for sterling weakness to first test 1.3660 before stabilizing.’ However, GBP / USD rallied after hitting 1.3671. The fast and robust rally has room to extend higher, but any advance is expected to face solid resistance at 1.3780. The main level at 1.3810 is unlikely to enter the picture. Support is at 1.3710 followed by 1.3680 “.
Next 1-3 weeks: “We went negative on GBP / USD earlier this week. In our last narrative yesterday (March 25, GBP / USD at 1.3690), we indicated that ‘the negative phase is considered intact as long as GBP / USD does not move above 1.3810 (‘ strong resistance ‘level)’. While there is no change in our opinion, the short-term bearish momentum has eased somewhat and support at 1.3660 may not appear as soon and the odds of sterling weakness extending to 1.3600 have diminished. Looking ahead, a break out of the ‘strong resistance’ at 1.3810 would indicate that GBP / USD could trade sideways for a period of time. “
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