British Pound: Further gains face 1.3655 cap against US Dollar – UOB

United Overseas Bank’s Quek Ser Leang and Lee Sue Ann report that GBP/USD spiked to 1.3630 before easing, leaving short‑term conditions overstretched. They still expect further British Pound (GBP) strength in the days ahead, but warn that momentum divergence suggests firm resistance at 1.3655, while a break below 1.3535 would signal that this upside target is unlikely to be reached.

Pound advance seen capped near 1.3655

"24-HOUR VIEW: GBP soared to a high of 1.3630 yesterday before easing to close at 1.3606 (+0.55%). The sharp rise appears to be overdone. This, combined with deeply overbought conditions, suggests that instead of continuing to rise, GBP is more likely to consolidate between 1.3570 and 1.3630."

"1-3 WEEKS VIEW: We highlighted on Monday (17 Aug, spot at 1.3540) that “the upside bias in GBP remains intact, but any advance is expected to face firm resistance at 1.3600.” In a sudden move yesterday, GBP surged and broke above 1.3600, printing a high of 1.3630. Further GBP strength remains likely, but with negative divergence forming on momentum indicators, this time around, any advance is expected to face firm resistance at 1.3655. Overall, only a breach of 1.3535 (‘strong support’ level previously at 1.3510) would indicate that 1.3655 is not coming into view."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)