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United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann highlight that GBP/USD extended last week’s rally, but overbought conditions should confine intraday moves to a 1.3490–1.3535 band. On a 1–3 week horizon, the British Pound (GBP) could test 1.3555, though a sustained break above is seen as unlikely, with strong support now at 1.3460.
Pound upside persists but gains seen limited
“24-HOUR VIEW: GBP soared last Friday and continued to rise yesterday, closing 0.10% higher at 1.3507. While GBP could rise further, the combination of slowing momentum and overbought conditions suggests any advance is likely to be contained within a 1.3490/1.3535 range.”
“1-3 WEEKS VIEW: We turned positive on GBP last Monday (03 Aug, spot at 1.3485), but we indicated that “it remains to be seen whether it can break above 1.3555.” On Wednesday (05 Aug, spot at 1.3450), we indicated that “upward momentum has since eased, but there is still a chance, albeit not a high one, for GBP to rise toward 1.3555.” Last Friday, GBP rose sharply, and yesterday, it rose further and printed a high of 1.3530. Upward momentum has improved slightly, and GBP could test 1.3555. Based on the prevailing momentum, a continued rise above this level appears unlikely. To keep the momentum going, GBP must hold above 1.3460 (‘strong support’ level previously at 1.3410).”
