GBP/USD now looks to a potential test of 1.3700 – UOB

In light of the recent price action, Cable could revisit the 1.3660 level ahead of 1.3700 in the short-term horizon.

Key Quotes

24-hour view: “The strong rise to 1.3637 yesterday came as a surprise (we were expecting GBP to trade between 1.3540 and 1.3600). Solid upward momentum suggests GBP could continue to rise towards 1.3660. The next resistance at 1.3700 is likely out of reach for today. Support is at 1.3620 followed by 1.3590.”

Next 1-3 weeks: “We have expected a stronger GBP since late last week. In our latest narrative from yesterday (11 Jan, spot at 1.3580), we highlighted that while upward momentum has been dented somewhat, there is still chance for GBP to advance to 1.3630. Our view was not wrong as GBP soared to 1.3637 before closing on a firm note in NY (1.3634, +0.41%). The price actions suggest further GBP strength is likely. The next resistance is at 1.3660 followed by 1.3700. The upward pressure is intact as long as GBP does not move below 1.3560 (‘strong support’ level was at 1.3525 yesterday).”