GBP/USD can potentially test 1.3530 – UOB Group

There is a chance for Pound Sterling (GBP) to test 1.3475; a continued rise above this level is unlikely. In the longer run, if GBP breaks clearly above 1.3475, it could rise further to 1.3505, potentially testing 1.3530, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Above 1.3475, GBP/USD might rise further to 1.3505

24-HOUR VIEW: "GBP rose to a high of 1.3408 two days ago. Yesterday, when GBP was at 1.3400, we indicated that 'there is a chance for GBP to test 1.3445.' However, we were of the view that 'the major resistance at 1.3475 is unlikely to come into view.' We were not wrong, as GBP edged to a high of 1.3455. Although there has been no clear increase in upward momentum, today there is a chance for GBP to test 1.3475 today. Based on the current momentum, a continued advance above this level is unlikely. The next resistance at 1.3500 is also unlikely to come under threat. On the downside, support levels are at 1.3420 and 1.3400."

1-3 WEEKS VIEW: "We highlighted yesterday (16 October, spot at 1.3400) that the recent 'downward momentum has eased, and GBP “is likely to range-trade within a range of 1.3320/1.3475 for now.' We did expect GBP to rise quickly to a high of 1.3455. The upside risk is building, and if GBP breaks clearly above 1.3475, it could rise further to 1.3505, potentially testing 1.3530. The likelihood of GBP breaking clearly above 1.3475 will increase in the next few days as long as it stays above the ‘strong support’ level, currently at 1.3360."