According to FX Strategists at UOB Group, GBP/USD could attempt a move to 1.3950 in the next weeks.
Key Quotes
24-hour view: “We highlighted yesterday GBP ‘could continue to strengthen but the major resistance at 1.3920 could be just out of reach for now’. Our view was not wrong as GBP rose to 1.3919 before easing off to close on a firm note at 1.3908 (+0.40%). While the advance is overbought, there is room for GBP to move above 1.3920 but the prospect for a break of the next major resistance at 1.3950 is not high. Support is at 1.3885 followed by 1.3860.”
Next 1-3 weeks: “We highlighted yesterday (15 Feb, spot at 1.3870) that ‘the outlook for GBP is still positive but it may take a few days for 1.3950 to come into the picture’. There is no change in our view even though shorter-term momentum has improved a tad. Looking ahead, a clear break of 1.3950 would shift the focus to 1.4000. Overall, the current GBP strength that started last week is deemed intact as long as it does not move below 1.3820 (‘strong support’ level was at 1.3780 yesterday).”
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