GBP/USD: Can test 1.3500 before a pause or pullback – UOB Group
Rebound in Pound Sterling (GBP) could test 1.3500 before a pause or pullback against US Dollar (USD) is likely; the strong resistance at 1.3520 is unlikely to come under threat. In the longer run, downward momentum is beginning to build; it may take a while before 1.3335 comes into view, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
The strong resistance at 1.3520 is unlikely to come under threat
24-HOUR VIEW: "Yesterday, we expected GBP to 'ease to 1.3375.' We pointed out that 'a dip below this level is not ruled out, but based on the current momentum, any further decline is unlikely to reach the major support at 1.3335.' The subsequent price movements did not turn out as we expected. After dipping to 1.3383, GBP rebounded strongly to close at 1.3470 (+0.36%). Although the rebound seems stretched, GBP could test 1.3500 before a pause or pullback is likely. The strong resistance at 1.3520 is unlikely to come under threat. On the downside, if GBP breaks below 1.3420 (minor support is at 1.3445), it would indicate that GBP is not rebounding further."
1-3 WEEKS VIEW: "We indicated yesterday (19 Jun, spot at 1.3415) that 'downward momentum is beginning to build, but it may take a while before 1.3335 comes into view.' While we did not quite expect the robust rebound in GBP, only a break of 1.3520 (no change in ‘strong resistance’ level from yesterday) would mean the buildup in momentum has faded."
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