In the opinion of UOB Group currency strategists, GBP / USD is still ready to visit the 1.3740 region before targeting 1.3800 on the short-term horizon.
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24 hour view: “We highlighted yesterday that ‘strong bullish momentum suggests GBP / USD could continue to rally towards 1.3660’. Adding:” The next resistance at 1.3700 is probably out of reach for today. “Subsequent strength in GBP / USD exceeded our expectations. as it rose to a high of 1.3715 during the New York session.While GBP / USD could strengthen further today, overbought conditions suggest a slower pace of advance and a sustained rise above 1.3740 seems unlikely. (The next resistance at 1.3800 is not expected to be threatened today.) On the downside, a breakout of 1.3650 (minor support is at 1.3670) would indicate that the current GBP / USD strength is ready to take a break. “
Next 1-3 weeks: “We have expected stronger GBP / USD since the end of last week. In our last narration yesterday (Jan 12, GBP / USD at 1.3635), we highlighted that ‘further GBP / USD strength is likely’ and ‘the Next resistance is at 1.3660, followed by 1.3700 ‘. Our view was correct even though we were not quite expecting the rapid way GBP / USD broke above 1.3700 (high at 1.3715). overbought, greater GBP / USD strength would not be surprising. That said, overbought conditions suggest a slower pace of advance. The next resistance is 1.3740, followed by 1.3800. Overall, the current bullish momentum for GBP / USD is intact as long as it doesn’t move below 1.3620 (the ‘strong support’ level was at 1.3560 yesterday).
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