The strong recent performance of the British pound could take GBP / USD to the 1.4300 level and beyond, in the opinion of UOB Group currency strategists.
Key Comments:
24 hour view: “We highlighted yesterday that ‘the GBP / USD overbought advance could first test 1.4100 before a pullback can be expected.’ We added that the British pound is not expected to ‘challenge the next resistance at 1.4150.’ GBP / USD rose to 1.4117 before closing at 1.4112. GBP / USD spiked during the early hours of the Asian session and just broke 1.4150. While further advance is not ruled out, the rapid rise seems exaggerated and unlikely. for the next major resistance at 1.4300 to kick in. Support is at 1.4120 followed by 1.4070 “.
Next 1-3 weeks: “We have had a positive outlook on GBP / USD for over 2 weeks. In our latest update on Monday (Feb 22, GBP / USD at 1.4030), we indicated that ‘bullish momentum remains strong and sterling could advance further to 1.4100’. We add, ‘a clear breakout of 1.4100 would shift focus to 1.4150’. We did not expect the GBP / USD surge as it broke past the 1.4150 region during the Asian session and the focus has shifted to 1.4300 followed by the 2018 high of 1.4377. On the downside, a breakout of 1.4020 (the ‘strong support’ level was 1.3940 yesterday) would indicate that the positive phase of GBP / USD is over. “
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