GBP/USD now focused on 1.3445 – UOB

FX Strategists at UOB Group stay bullish on Cable and expect it to test the mid-1.3400s in the near term.

Key Quotes

24-hour view: “Expectation for sideway trading was wrong as GBP rocketed to hit a high of 1.3300 yesterday. The strong daily closing coupled with impulsive momentum suggests further upward pressure but the next resistance at 1.3335/40 could be just out of reach for now (the 1.3300 top is acting as a minor resistance). On the downside, 1.3220 is likely strong enough to hold for the day (minor support at 1.3250)”.

Next 1-3 weeks: “While we turned bullish GBP last Friday (08 Sep, spot at 1.3100), the pace and extent of the rally over the past couple of days came as a surprise. The 1.3265 target was easily exceeded as GBP surged to a high of 1.3300 yesterday (with the help of a strong UK inflation number). From here, the focus has shifted to 1.3445, the high in September last year. On a shorter-term note, 1.3350 is reasonably strong resistance. Stop-loss is adjusted higher to 1.3150 from 1.3050 even though 1.3220 is already a strong support”.