GBP/USD likely to advance further – UOB

Pablo Piovano FXStreet

FX Strategists at UOB Group remain neutral on Cable although another leg lower is not ruled out.

Key Quotes

“We highlighted that the “prospect for a move above last month’s 1.4244 peak has increased”. We followed-up on Friday (13 Apr, 1.4230) by indicating that GBP “may have enough fuel to make a run for 1.4280” but noted that the odds for a sustained move 1.4280 are not high. GBP subsequently rose to a high of 1.4296 during NY hours last Friday before easing off. While the prospect for a sustained rally is still not high, the rapidly improving momentum suggests that another ‘up-leg’ could not be ruled out even though the year-to-date peak of 1.4346 is likely out of reach (1.4310 is already quite a strong resistance)”.

“From a shorter-term perspective, the current rally is at ‘over-stretched’ levels and in order to maintain the current impetus, GBP should continue to advance quickly as a consolidation at these overbought levels would lead to a rapid loss in momentum. Overall, we expect GBP to stay supported and only a clear break below the ‘key support’ at 1.4145 (level unchanged) would indicated that a short-term top is in place. Minor support is at 1.4205”.

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.

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