GBP/USD: The next major resistance at 1.2900 is likely out of reach – UOB Group

Rapid rise could continue; the next major resistance at 1.2900 is likely out of reach. In the longer run, risk for Pound Sterling (GBP) remains clearly on the upside vs US Dollar (USD); the next level to monitor is 1.2900, UOB Group's FX analysts Quek Ser Leang and Peter Chia note. 

Risk for GBP remains clearly on the upside

24-HOUR VIEW: "Following the strong rally in GBP two days ago, we noted yesterday that 'the sharp and rapid rally appears to be running ahead of itself.' However, we highlighted that GBP 'could test the major resistance at 1.2730.' We also highlighted that 'a break of this level is not ruled out, but given the overbought conditions, the next major resistance at 1.2770 is unlikely to come into view.' Our call for a stronger GBP was correct, but we did not expect the strong rally that reached a high of 1.2800. While the rapid rise appears set to continue, the next major resistance at 1.2900 is likely out of reach today (there is another resistance level at 1.2850). On the downside, there is a pair of support levels at 1.2750 and 1.2730." 

1-3 WEEKS VIEW: "We revised our view to positive yesterday (04 Mar, spot at 1.2700), indicating that 'the risk for GBP is on the upside.' That said, we pointed out, 'to rise in a sustained manner, GBP must break and remain above 1.2730.' GBP not only broke above 1.2730, but it also surged to 1.2800. Clearly, the risk remains on the upside. The next level to monitor is 1.2900. On the downside, the ‘strong support’ at 1.2680 (level was at 1.2610 yesterday) will likely remain intact for the next couple of days."