GBP/USD: Impulsive momentum suggests further GBP strength – UOB Group
|Impulsive momentum suggests further GBP strength; it remains to be seen if 1.3100 is within reach today. In the longer run, outlook for GBP has shifted to positive; the two technical levels to watch are 1.3210 and 1.3290, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
Technical levels to watch are 1.3210 and 1.3290
24-HOUR VIEW: "In early Asian trade yesterday, we noted that the previous day’s 'price action still appears to be part of a range-trading phase.' We expected GBP to “trade between 1.2750 and 1.2870.” We did not anticipate the GBP to rally to 1.2996. Impulsive momentum suggests further GBP strength, but it remains to be seen if 1.3100 is within reach today. On the downside, any pullback is expected to face solid support at 1.2880 (minor support at 1.2920)."
1-3 WEEKS VIEW: "Our latest narrative was from Tuesday (08 Apr, spot at 1.2760), wherein 'while GBP could decline further, it is unclear if it can reach the next major support at 1.2580.' We indicated that “a breach of 1.2925 (‘strong resistance’ level) would suggest that GBP is not declining further.” Yesterday, in a sudden move, GBP staged a sharp reversal and surged. The price action has shifted the outlook to positive. The two technical levels to watch are 1.3210 and 1.3290. We will maintain our view as long as 1.2820 (‘strong support’ level) is not breached."
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