GBP/USD shifts the focus to 1.3100 – UOB

Pablo Piovano FXStreet

UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang suggest GBP/USD could revisit 1.3100 in the not-so-distant future.

Key Quotes

24-hour view: We expected GBP to break above 1.2950 yesterday. However, we highlighted that “it remains to be seen if there is enough momentum to carry GBP to the next major resistance at 1.3000.” In NY trade, GBP rose one pip above 1.3000 before closing on a firm note at 1.2990 (+0.45%). Conditions are severely overstretched, but only a breach of 1.2930 (minor support is at 1.2965) would indicate that the current upward pressure has faded. As long as 1.2930 is not breached, GBP could grind higher to 1.3035. The major resistance at 1.3100 is highly unlikely to come into view today.

Next 1-3 weeks: Yesterday (12 Jul, spot at 1.2930), we highlighted that “the risk is for GBP to rise further.” We added, “if it breaks above 1.3000, the focus will shift to 1.3100”. In late NY trade, GBP rose to a high of 1.3001. While the focus is at 1.3100 now, severely overbought conditions suggest it may take a few days before this level comes into view. Overall, only a breach of 1.2885 (‘strong support’ level was at 1.2820 yesterday) would indicate that the GBP strength that started on Monday has come to an end.

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.

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

Editor's Picks

EUR/USD drops to daily lows near 1.1630

EUR/USD now loses some traction and slips back to the area of daily lows around 1.1630 on the back of a mild bounce in the US Dollar. Fresh US data, including the September PCE inflation numbers and the latest read on December consumer sentiment, didn’t really move the needle, so the pair is still on course to finish the week with a respectable gain.

GBP/USD trims gains, recedes toward 1.3320

GBP/USD is struggling to keep its daily advance, coming under fresh pressure and retreating to the 1.3320 zone following a mild bullish attempt in the Greenback. Even though US consumer sentiment surprised to the upside, the US Dollar isn’t getting much love, as traders are far more interested in what the Fed will say next week.

Gold makes a U-turn, back to $4,200

Gold is now losing the grip and receding to the key $4,200 region per troy ounce following some signs of life in the Greenback and a marked bounce in US Treasury yields across the board. The positive outlook for the precious metal, however, remains underpinned by steady bets for extra easing by the Fed.