GBP/USD now targets 1.3500 and above – UOB

Cable could extend the upside momentum beyond 1.35 the figure in the next weeks, in opinion of FX Strategists at UOB Group.

Key Quotes

24-hour view: “We highlighted yesterday that GBP ‘could test the 1.3410 resistance firsts before a pullback should ensue’. We clearly underestimated GBP’s strength as it soared to a high of 1.3481 before dropping sharply to close slightly higher at 1.3386 (+0.12%). The recent strong momentum indicators are beginning to turn ‘neutral’. For today, GBP is likely to trade sideways, expected to be between 1.3330 and 1.3440.”

Next 1-3 weeks: “Two days ago on 31 Aug (spot at 1.3350), we indicated that GBP ‘could strengthen towards 1.3450, albeit likely at a slower pace’. While the 1.3450 level was exceeded as GBP soared to a high of 1.3481 yesterday (01 Sep), the advance was short-lived as GBP dropped back down to close slightly higher at 1.3386 (+0.12%). Upward momentum has been dented somewhat but GBP could still move towards the 2019 peak at 1.3516. Meanwhile, overbought short-term conditions could lead to a few days of consolidation and only a break of 1.3260 (‘strong support’ level previously at 1.3220) would indicate that a short-term top is in place.”