GBP/USD constructive above 1.2940 – UOB

Cable’s momentum remains supported as long as it trades above 1.2940, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “The sudden strong surge higher in GBP was unexpected. The rally appears to be running ahead of itself but with no sign of weakness just yet, further up-move towards 1.3065 would not be surprising. That said, the next resistance at 1.3100 is unlikely to come into the picture for now. Support is at 1.3000 but only a move back below 1.2970 would indicate that the immediate upward pressure has eased”.

Next 1-3 weeks: “The sudden and strong surge in GBP yesterday that easily took out the 1.3020 resistance was unexpected. While upward momentum has clearly improved, we are not convinced that the current movement is the start of a bullish phase. That said, GBP is expected to stay underpinned in the coming days unless there is a move back below 1.2940 (with strong shorter-term support at 1.2970). On the upside, GBP has to clear 1.3100 to indicate that a move towards the year-to-date high at 1.3267 has started”.