In the opinion of the currency strategists of UOB Group, the pound could head towards the 1.3760 zone in the coming weeks.
24 hour perspective: “While we noted yesterday that bearish momentum was waning and sustained weakness is unlikely to continue, we do not anticipate the sudden rise in the British pound that sent GBP / USD up + 1.15% (1.3670). Bullish momentum continues. remains strong and the pound is likely to rise despite overbought conditions suggesting that may not be able to sustain a foothold above last week’s high at 1.3703 (next resistance is at 1.3730). On the downside, a break of 1.3600 would indicate that the current bullish pressure has eased (minor support is at 1.3630) ”.
Next 1-3 weeks: “Two days ago (Jan 11, pair at 1.3525), we highlighted that a daily close below 1.3460 could lead to the GBP moving lower to 1.3400. Subsequently, the British pound fell to 1.3451 before making a surprisingly strong rise yesterday to a high of 1.3670. The prospect of sterling weakness has dissipated and, although risk has moved higher, any advance is expected to face solid resistance at 1.3760. Overall, the pound is expected to trade on a bullish bias at 1.3550 acting as a ‘strong support’ level. “
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