GBP/USD to test 1.3000 in the near term – UOB Group
|Chance for Pound Sterling (GBP) to test 1.3000 vs US Dollar (USD); a clear break above this level seems unlikely. In the longer run, to continue to rise, GBP must break and remain above 1.3000, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
To continue to rise, GBP must break and remain above 1.3000
24-HOUR VIEW: "When GBP was at 1.2940 yesterday, we indicated that 'while conditions are overbought, GBP may have just enough momentum to test the key resistance at 1.2975 before the risk of a pullback increases.' We added, 'The next resistance at 1.3000 is unlikely to come under threat,' and 'support levels are at 1.2920 and 1.2900.' Our view was not wrong, as after dipping to 1.2914, GBP rose and reached a high of 1.2990. GBP closed at 1.2960, higher by 0.10%. Conditions remain overbought, but today, there is a chance for GBP to test 1.3000. A clear break above this level seems unlikely. On the downside, a breach of 1.2915 (minor support is at 1.2940) would indicate that the current upward pressure has eased."
1-3 WEEKS VIEW: "Two days ago, GBP rose to 1.2966. Yesterday (12 Mar, spot at 1.2940), we noted that 'there has been no further increase in momentum.' We highlighted the following: 'The uptrend appears to be ready to consolidate or pause, and a break below 1.2855 (‘strong support’ level) would indicate that the current upward momentum has eased. Looking ahead, should GBP break above 1.2975, there is another major resistance at 1.3000.' While GBP subsequently rose to 1.2990, upward momentum only increased slightly. To continue to rise, GBP must break and remain above 1.3000. The chance of GBP breaking clearly above 1.3000, although not high, will remain intact as long as 1.2880 (‘strong support’ level was at 1.2855 yesterday) is not breached. Looking ahead, the next level to watch above 1.3000 is at 1.3050."
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