The currency strategists of UOB Group believe that the pound could still advance to the 1.40 level and beyond in the coming weeks.
24 hour perspective: “We expected the GBP to strengthen yesterday, but we are of the opinion that major resistance at 1.4010 was unlikely. We added that there was another resistance at 1.3980. Subsequently, the pound advanced to 1.3979 before giving way. Bullish momentum is starting to wane. , but the GBP could retest the 1.3980 level first before a more substantial pullback can be expected. Major resistance at 1.4010 is unlikely to enter the scene. Support is at 1.3925 followed by 1.3900 “.
Next 1-3 weeks: “Our view from yesterday (April 29, even at 1.3950) still stands. As highlighted, the pound is expected to trade with a bullish bias towards 1.4010. At this stage, the prospect of a sustained rise above this large resistance is not high. On the downside, a breakout of 1.3850 (‘strong support’ level) would indicate that the currency is not ready to move up. “
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