GBP/USD does not appear to have enough momentum to reach 1.2730 – UOB Group

Room for further rebound, but Pound Sterling (GBP) does not appear to have enough momentum to reach 1.2730 vs US Dollar (USD). In the longer run, momentum is slowing; a breach of 1.2580 would indicate that 1.2730 is out of reach this time around, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

A breach of 1.2580 might indicate that 1.2730 is out of reach

24-HOUR VIEW: "GBP fell sharply from a high of 1.2690 two days ago. Yesterday, when it was at 1.2625, we highlighted that 'while the sharp drop could extend, any decline is likely to remain within a lower range of 1.2600/1.2670.' We added, 'a sustained break below 1.2600 is unlikely.' GBP then dropped to 1.2607 before rebounding to a high of 1.2678, closing at 1.2666 (+0.32%). While there is room for further rebound, GBP does not appear to have enough momentum to reach the major resistance at 1.2730. Note that there is another resistance level at 1.2700. Support is at 1.2655, followed by 1.2635."

1-3 WEEKS VIEW: "We have held a positive GBP view since the middle of the month (as annotated in the chart below). Yesterday (25 Feb, spot at 1.2625), we indicated that 'upward momentum is beginning to slow, and a breach of 1.2580 (‘strong support’ level) would indicate that 1.2730 is out of reach this time around.' There is no change in our view. Looking ahead, GBP must break clearly above 1.2730 before further advances can be expected."