In the opinion of the currency strategists at UOB Group, GBP / USD could move into a consolidation phase before continuing with additional gains in the coming weeks.
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24 hour view: “We highlighted yesterday that ‘there is room for GBP / USD to advance to 1.3695 and possibly 1.3715’. The subsequent advance exceeded our expectations as GBP / USD rose to 1.3734. However, the pair retreated sharply from the high. Retracement has room to extend, but any weakness is probably limited to a test of 1.3645. Strong support at 1.3595 is not expected to enter the scene. Resistance is at 1.3695, followed by 1.3715. “
Next 1-3 weeks: “We highlighted yesterday that GBP / USD ‘is likely to rise to 1.3715’. And added that ‘a breakout of 1.3715 would shift focus to 1.3750.’ We weren’t quite expecting how quickly GBP / USD moved above 1.3715, as it jumped to 1.3734 during the London session hours before reversing. There is no change in our view for now, but GBP / USD could consolidate for a couple of days first before heading higher. Just a breakout of the “strong support” at 1.3595 (no change in level) would indicate that 1.3750 is out of reach. “
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