GBP/USD seen breaking above 1.3850 near term – UOB

The outlook for Cable remains constructive with the next target at 1.3850 and beyond in the short-term horizon, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “Yesterday, we expected GBP to ‘trade sideways within a 1.3765/1.3830 range’. However, GBP dropped to 1.3743 before rebounding sharply to 1.3833 during NY hours. Despite the rebound, upward momentum has not improved by all that much. However, there is room for GBP to edge above 1.3850. For today, the next major resistance at 1.3915 is not expected to come into the picture. Support is at 1.3790 followed by 1.3755.”

Next 1-3 weeks: “Our narrative from yesterday (20 Oct, spot at 1.3795) still stands. As highlighted, GBP is still strong and an advance to 1.3850 would not be surprising. While GBP is likely to break 1.3850, upward momentum is not that strong for now and 1.3915 may not come into the picture so soon. Overall, the GBP strength that started last Thursday (14 Oct, spot at 1.3665) is deemed intact as long as GBP does not move below 1.3720 (no change in ‘strong support’ level from yesterday).”