Pound Sterling (GBP) could take a look at the key resistance at 1.3620; it stays to be seen if it may possibly break and maintain above this degree. Within the longer run, outlook for GBP stays optimistic, and it could rise to 1.3620; the probabilities of it reaching 1.3660 this time round are extra restricted, UOB Group’s FX analysts Quek Ser Leang and Peter Chia be aware.
Outlook for GBP stays optimistic
24-HOUR VIEW: “On Tuesday, GBP rose to a excessive of 1.3523. Yesterday, Wednesday, when GBP was at 1.3505, we held the view that it ‘might proceed to rise, however any advance is unlikely to succeed in the key resistance at 1.3555.’ We underestimated the upward momentum, as GBP soared above 1.3555, reaching a excessive of 1.3585. Sturdy momentum is prone to outweigh the overbought situations, and GBP could take a look at the key resistance at 1.3620 right now. It stays to be seen if it may possibly break and maintain above this degree. To maintain the momentum, GBP should maintain above 1.3530 (with minor help at 1.3555).”
1-3 WEEKS VIEW: “We turned optimistic on GBP final Friday (08 Aug, spot at 1.3445). We indicated that ‘the fast enhance in momentum might result in GBP rising to 1.3515.’ After GBP rose above 1.3515 two days in the past, we acknowledged early yesterday (13 Aug, spot at 1.3505) that ‘regardless of the advance, there was no clear enhance in upward momentum.’ Nonetheless, we identified that ‘there may be scope for GBP to proceed to rise to 1.3555.’ We added, ‘it’s too early to count on the late July excessive, close to 1.3590, to become visible.’ Whereas our directional name was appropriate, we underestimated the energy and persistence of the upward momentum, as GBP soared to a excessive of 1.3585. From right here, the outlook for GBP stays optimistic, and it could rise to 1.3620, though the probabilities of it reaching 1.3660 this time round are extra restricted. General, solely a breach of 1.3485 (‘robust help’ degree was at 1.3420 yesterday) would point out that GBP will not be rising additional.”
