GBP/USD: Further gains meet strong resistance around 1.3260 – UOB

There is scope for extra upside in cable, although there is a tough barrier in the 1.3260 area for the time being, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “We highlighted yesterday that GBP ‘is likely to trade sideways within a range of 1.3115/1.3205’. Our view for sideway-trading was not wrong even though GBP traded within a narrower range than expected (1.3128/1.3210) before closing little changed at 1.3169 (-0.06%). The price still appears to be part of a consolidation and we continue to expect GBP to trade sideways, likely within a range of 1.3120/1.3220.”

Next 1-3 weeks: “Last Friday (18 Mar, spot at 1.3170), we highlighted that the chance for a sustained rise above 1.3220 has increased. GBP subsequently rose to 1.3211 and yesterday (21 Mar), it advanced to 1.3210 before easing off. Upward momentum has waned somewhat but we still see room for GBP to move above 1.3220. At this stage, any further advance is expected to face solid resistance at 1.3260. On the downside, a breach of 1.3090 (‘strong support’ level was at 1.3070) yesterday would indicate that the current upward pressure has eased.”