GBP/USD still targets the 1.3400 level and above – UOB

Cable looks firm and could advance to the area past 1.3400 as long as it trades above 1.3200, noted FX Strategists at UOB Group.

Key Quotes

24-hoour view: “Our expectation for GBP to ‘edge lower and test 1.3260’ did not materialize as it trade between 1.3294 and 1.3380 before closing on a firm note at 1.3361 (+0.26%). The underlying tone has firmed somewhat and we see chance for GBP to edge upwards to 1.3400. At this stage, the prospect for a sustained advance above this level is not high (next resistance is at 1.3440). Support is at 1.3335 followed by 1.3300.”

Next 1-3 weeks: “We have held a positive view in GBP since last Tuesday (17 Nov, spot at 1.3210). In our latest narrative from yesterday (23 Nov), we indicated that ‘upward momentum has improved and a break of 1.3322 would shift the focus to 1.3360 (followed by 1.3400)’. That said, we did not anticipate the sped-up price actions as GBP blew past 1.3322 and 1.3360 and hit a high of 1.3396. The advance was however short-lived as GBP plummeted from the high (overnight low of 1.3265). Despite the set-back, it is too soon to call for a short-term top. As long as 1.3200 is intact (no change in ‘strong support’ level), there is chance, albeit not a high one, for GBP to push above 1.3400. However, overbought shorter-term conditions could lead to a couple of days of consolidation first. Looking forward, the next resistance level of note above 1.3400 is at the year-to-date high of 1.3481.”