GBP/USD: Further gains remain on the cards

Pablo Piovano FXStreet

GBP/USD is expected to edge further up in the short-term horizon, according to Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group.

Key Quotes

24-hour view: The sharp rise in GBP to a high of 1.2562 yesterday came as a surprise (we were expecting it to trade in a range). While the rally appears to be overdone, it could extend even though the resistance at 1.2680 is highly unlikely to come into view today (there is another resistance at 1.2600). In order to keep the momentum going, GBP must stay above 1.2495 (minor support is at 1.2520).

Next 1-3 weeks: Yesterday (08 Jun, spot at 1.2445), we were of the view that GBP “is likely to consolidate between 1.2350 and 1.2550 for the time being”. We did not anticipate the strong surge in GBP that sent it above 1.2550 (high has been 1.2562). While GBP is likely to rise further, it remains to be seen if it has enough momentum to revisit last month’s high near 1.2680. On the downside, a breach of 1.2450 (‘strong support’ level) would indicate that 1.2680 is not coming into view.

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

EUR/USD flirts with weekly lows near 1.1770

EUR/USD now comes under further selling pressure, breaking below the 1.1800 support to challenge the area of weekly throughs near 1.1770 on Thursday. The pair’s decline comes in response to marked gains in the US Dollar amid steady geopolitical tensions. Ealier in the day, the ECB’s Lagarde delivered cautious remarks, although the currency remained apathetic.

GBP/USD threatens the 200-day SMA near 1.3440

GBP/USD rapidly leaves behind Wednesday’s strong advance, coming under heavy pressure and retesting the 1.3440 zone, where the critical 200-day SMA is located. Cable’s deep pullback follows the strong gains in the Greenback, while investors continue to pencil in a potential BoE rate cut in March.

Gold trims gains, slips back to around $5,170

Gold is now facing some downside pressure, hovering around the $5,170 region on Thursday. The yellow metal surrenders part of its earlier gains on the back of the resurgence of the buying interest in the Greenback. In the meantime, geopolitical tensions in the Middle East continue to limit the downside potential for now.