The perspective of GBP / USD looks positive with the next target at the 1.4235 level over the next several weeks, UOB Group currency strategists suggest.
Key Comments:
24 hour view: “We highlighted yesterday that ‘the move is over extended’ and we are of the opinion that ‘any further strength in the British pound will likely be limited to a test of 1.4175’. As expected, GBP / USD strengthened but failed to test 1.4175 (high of 1.4167). The bullish momentum has relaxed and this coupled with the overbought conditions suggest that GBP / US is unlikely to strengthen much further today. The British pound is more likely to consolidate and move between 1.4100 and 1.4175 “.
Next 1-3 weeks: “Not much to add to our update yesterday (May 11, GBP / USD at 1.4125). As highlighted, the GBP remains strong and the focus is on the yearly high of 1.4235. That said, short-term overbought conditions could lead to a few days of consolidation first. The positive outlook is considered intact as long as the British pound does not move below 1.4020 (no change in the level of ‘strong support’) “.
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