GBP/USD: Overbought rally eyeing 1.3605 – UOB

United Overseas Bank (UOB) strategists Quek Ser Leang and Lee Sue Ann highlight that GBP/USD extended gains to 1.3590, with short-term conditions remaining overbought. They see scope for a further push toward 1.3605, while judging the 1.3640 resistance as likely out of reach for now. Over the next 1–3 weeks, further Pound strength is expected unless support at 1.3415 gives way.

Further gains but upside looks stretched

"While we expected GBP to “continue to rise” yesterday, we highlighted that “overbought conditions suggest any advance is unlikely to reach the major resistance at 1.3565.” However, the strong upward momentum overwhelmed the overbought conditions as GBP soared to a high of 1.3590. "

"Conditions remain overbought, but GBP could rise to 1.3605 before leveling off. The major resistance at 1.3640 is likely out of reach. To sustain the overbought momentum, GBP must hold above 1.3525, with minor support at 1.3555."

"Further GBP strength would not be surprising, but given the overbought short-term conditions, the next technical target at 1.3645 may not come into view so soon."

"Overall, only a breach of 1.3415 (‘strong support’ level was at 1.3415 yesterday) would suggest that GBP is not strengthening further."

"A weekly close below the key support at 1.3300 could trigger a decline toward the major support zone at 1.2945/1.3010."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)