GBP/USD: Outlook is positive and could visit 1.2812 – UOB

Cable’s outlook now looks constructive and could attempt a move to levels beyond the 1.2800 mark in the next weeks, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “While we expected ‘further GBP strength’ yesterday, we held the view that ‘the major resistance at 1.2740 may not be easy to crack’. However, GBP blew past 1.2740 before easing off after touching an overnight high of 1.2768. After two straight days of back-to-back strong gains, GBP is deep in overbought territory now. That said, GBP could continue to strengthen, albeit likely at a slower pace and the June’s peak at 1.2812 could be just out of reach (the overnight high of 1.2768 is acting as minor resistance). Support is at 1.2700 followed by 1.2665.”

Next 1-3 weeks: “We turned positive in GBP yesterday (21 Jul, spot at 1.2670) and held the view that GBP ‘is likely to trade with an upward bias’. We added, ‘a break of 1.2740 could lead to a rapid rise to the June’s peak at 1.2812’. Our expectation was not wrong as GBP soared to an overnight high of 1.2768. Further GBP strength is likely and from here, the focus is at 1.2812 and looking forward, the next resistance is at 1.2860. On the downside, the ‘strong support’ level has moved higher to 1.2630 from yesterday’s level of 1.2560.”