GBP/USD still targets a move to the 1.3000 mark – UOB

Cable’s recent performance hints at a potential move to the key 1.30 mark in the next weeks, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “We highlighted yesterday that ‘upward momentum is still strong, overbought conditions suggest a slower pace of advance and the next major resistance at 1.3000 is out of reach for today’. We added, ‘1.2940 is already quite a strong level’. Our view was not wrong as GBP rose to an overnight high of 1.2952. The combination of overbought conditions and waning momentum suggest further sustained gain in GBP is unlikely for today. While GBP could edge above 1.2952 from here, any advance is viewed as part of a 1.2860/1.2965 range. In other words, a sustained rise beyond 1.2965 is unlikely.”

Next 1-3 weeks: “While we noted yesterday (27 Jul, spot at 1.2805) ‘the next level focus on is at 1.2860 followed by 1.2900’, we did not quite expect the latter level to come into the picture so quickly as GBP surged to an overnight high of 1.2904. The positive phase in GBP that started one week ago (21 Jul, spot at 1.2670) is still clearly intact. From here, all eyes are on the round-number resistance level of 1.3000. Overall, the current positive phase in GBP is deemed as intact as long 1.2740 (‘strong support’ level was at 1.2700 yesterday) is not taken out. On a shorter-term note, 1.2800 is already quite a solid level.”