The GBP / USD is holding firm and could try to move to 1.4010 in the coming weeks, suggest currency strategists at UOB Group.
Key Comments:
24 hour view: “Yesterday we expected GBP / USD to ‘trade sideways within a range of 1.3860 / 1.3920’. Subsequently, the British pound fell to a low of 1.3863 but during the American session it rose sharply to 1.3951. The rapid improvement in the price is expected. Momentum leads to further strength for the pair. That said, the rapid rise appears to be ahead of itself and major resistance at 1.4010 is unlikely to enter the scene (there is another resistance at 1.3980). Support is at 1.3925 followed by 1.3900 ” .
Next 1-3 weeks: “We expected GBP / USD to ‘trade between 1.3750 and 1.3950’ since last Friday (April 23, GBP / USD at 1.3845). In our last narrative on Tuesday (April 26, GBP / USD at 1.3880), we highlighted that “looking ahead, a breakout of 1.3950 would not be surprising, but GBP / USD has to close above 1.3980 before a sustained advance can be expected.” GBP / USD rose during the American session and although it did not close Above 1.3980, the strong and rapid advance has resulted in vastly improved momentum. From here, GBP / USD is expected to move with a bullish bias towards 1.4010. At this time, the outlook for a sustained rally Above this great resistance is not high. On the downside, a break of 1.3850 (‘strong support’ level) would indicate that GBP / USD is not ready to move higher. “
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