In the opinion of the currency strategists of UOB Group, the bullish momentum in the pound could extend to the 1.4235 level in the coming weeks.
24 hour perspective: “While our expectation of the British pound strengthening yesterday was correct, our view that the main resistance at 1.4110 was unlikely to be threatened was not because the British pound easily broke above 1.4110 (1.4158 high) . The strong and rapid rally is overloaded but shows no signs of weakness yet. However, any further strength from the British pound will likely be limited to a test of 1.4175. A move towards the year-to-date high of 1.4235 would be a surprise. On the downside, a breakout of 1.4070 would indicate that the current bullish pressure has eased (minor support is at 1.4100) ”.
Next 1-3 weeks: “We highlighted yesterday that the strong build-up of momentum suggested further strength for the British pound. We added that the next resistance was at 1.4110. That said, we do not anticipate the rapid way the GBP spiked past 1.4110 (rose to 1.4158 during the initial session in New York). Bullish momentum remains strong and attention has shifted to the year-to-date high of 1.4235. On the downside, a break out of the ‘strong support’ at 1.4020 (the level was at 1.3940 yesterday) would indicate that the current bullish pressure has eased. “
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