British Pound: Room to rise toward 1.3480 against US Dollar – UOB

United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann turned constructive on GBP/USD, noting recent gains and rising momentum as the Bank of England (BoE) prepares to hike rates for the first time in over three years. They see short-term consolidation between 1.3380 and 1.3435, but on a 1–3 week and 1–3 month basis they highlight scope for the Pound to test 1.3480, provided key support at 1.3360 holds.

Pound bias tilts to upside

"24-HOUR VIEW: Following last Friday’s price action, we highlighted yesterday that GBP “appears to have entered a range-trading phase between 1.3360 and 1.3420.” The subsequent price movements did not unfold as expected, as GBP rebounded from 1.3380 to 1.3448 before pulling back to close at 1.3408 (+0.14%). Upward momentum has increased, but it is insufficient to indicate a continued rise. Today, we expect GBP to consolidate between 1.3380 and 1.3435."

"1-3 WEEKS VIEW: We turned positive on GBP last Friday (30 Oct, spot at 1.3380). We indicated that GBP “could rise toward 1.3420.” We pointed out that GBP “must break clearly above this level before a move to 1.3450 can be expected.” After GBP subsequently rose to 1.3433 and then retreated, we highlighted yesterday (02 Nov, spot at 1.3390) that “the price action suggests that 1.3435 is a key resistance now, and GBP must break clearly above this level before a sustained advance is likely.” GBP subsequently broke above 1.3435, rising to a high of 1.3448 before pulling back. Although upward momentum has not increased significantly, the price action suggests there is scope for GBP to test 1.3480. On the downside, a breach of 1.3360 (‘strong support’ level was at 1.3330 yesterday) would indicate that 1.3480 is not coming into view"

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