Impulsive momentum could push Pound Sterling (GBP) higher vs US Dollar (USD); overbought conditions suggest 1.2730 could be just out of reach for now. In the longer run, boost in momentum indicates further GBP strength to 1.2730, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
Impulsive momentum can push GBP higher
24-HOUR VIEW: "Our view for GBP to trade sideways yesterday was incorrect. Instead of trading sideways, GBP surged to a high of 1.2671 before closing on a strong note at 1.2668 (+0.66%). Although the rapid rise is deeply overbought, the current impulsive momentum could continue to push GBP higher. That said, the major resistance at 1.2730 could be just out of reach for now. On the downside, support levels are at 1.2645 and 1.2620."
1-3 WEEKS VIEW: "We turned positive in GBP one week on 14 Feb when it was at 1.2560. After GBP rose to 1.2641 and pulled back sharply, we indicated yesterday (20 Feb, spot at 1.2585) that 'upward momentum is beginning to slow, but only a breach of 1.2525 (‘strong support’ level) would mean that GBP is not strengthening further.' GBP subsequently took off and surged to a high of 1.2671. The boost in momentum indicates further GBP strength to 1.2730. On the downside, the ‘strong support’ level has moved higher to 1.2580 from 1.2525."
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