The British Pound (GBP) could continue to strengthen. As the rapid rise approaches overbought levels, 1.2860 is unlikely to be threatened. Nevertheless, the risk for GBP remains to the upside, and 1.2860 is the level to watch, FX strategists at UOB Group.
1.2860 is the level to watch
24 HOUR VIEW: “Our view that GBP would remain sideways last Friday was incorrect as it rose, breaking above the solid resistance level at 1.2805. The Pound closed on a firm note at 1.2814 (+0.44%). Although the rapid rise is approaching overbought levels, further GBP strength is not ruled out. However, The significant resistance at 1.2860 is highly unlikely to be threatened. It should be noted that there is another resistance level at 1.2840. Support is at 1.2785; a break of 1.2770 would mean that the GBP is not advancing any further.”
1-3 WEEK OUTLOOK: “While we turned positive on GBP last Thursday (July 4, pair at 1.2745), we noted that ‘there is a strong resistance level at 1.2805, ahead of last month’s high of 1.2860.’ Last Friday, GBP broke above 1.2805, hitting a high of 1.2817. Unsurprisingly, the risk for the Pound remains to the upside, and the level to watch is 1.2860. The upside risk remains intact as long as GBP holds above 1.2740 (‘strong support’ was at 1.2685 last Friday).”
Source: Fx Street
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