British Pound: Is Upward Momentum Against US Dollar Gathering Pace? – UOB

A strong recovery from recent lows has overturned the earlier bearish bias for GBP/USD, according to United Overseas Bank strategists Quek Ser Leang and Lee Sue. They now expect the British Pound (GBP) to edge towards nearby resistance, with gains likely to be gradual and dependent on key support levels holding. A more decisive advance towards higher targets would require a clear break above the initial resistance levels.

Can the Pound reach 1.3420 and then 1.3450?

"24-HOUR VIEW: Two days ago, GBP declined to a low of 1.3274 and then rebounded strongly. When GBP was at 1.3330 yesterday, we pointed out that “the immediate downward pressure has eased.” We highlighted that GBP “is likely to range-trade between 1.3295 and 1.3350.” GBP subsequently dipped to 1.3299 before staging a sharp rise, reaching a high of 1.3383. While the sharp rise appears excessive, GBP could continue to rise and test 1.3420. The next resistance at 1.3450 is unlikely to come under threat. Support is at 1.3355; a breach of 1.3340 would indicate that the immediate upward pressure has eased."

"1-3 WEEKS VIEW: Two days ago (28 Oct, spot at 1.3310), we highlighted that “the bias for GBP is on the downside toward 1.3265.” GBP then declined to a low of 1.3274 and rebounded. Yesterday, GBP rebounded further, breaking above our ‘strong resistance’ level at 1.3365. Downward pressure has eased with the break of the ‘strong resistance’ level. Upward momentum is building, albeit tentatively. From here, we expect GBP to rise toward 1.3420. GBP must break clearly above this level before a move to 1.3450 can be expected. To sustain the momentum buildup, GBP must hold above the ‘strong support’ level, now at 1.3310."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)