As long as 1.3160 is not breached, there is room for GBP to test 1.3250, after which the advance might pause, UOB Group FX strategists Quek Ser Leang and Lee Sue Ann note.
The 1.3250 resistance is the next target
24-HOUR VIEW: “We did not anticipate GBP to soar last Friday (we were expecting range trading). The sharp and swift rise during NY trade seems to be running ahead of itself. However, as long as 1.3160 is not breached, there is room for GBP to test 1.3250, after which the advance might pause. The next major resistance at 1.3300 is unlikely to come into view. To keep the momentum going, GBP must not break below 1.3165 (minor support is at 1.3185).”
1-3 WEEKS VIEW: “The level to monitor is 1.3320. Last Thursday (22 Aug, spot at 1.3090), we indicated that ‘the recent price action suggests there is scope for GBP to rise to, and potentially break above the 2023 peak of 1.3144.’ We added, ‘the next level to monitor above 1.3144 is 1.3200.’ While our view of a higher GBP was correct, the speed of its advance exceeded our expectations, as it surged by 0.94% last Friday (NY close of 1.3216) and closed at its highest level since February 2022. Not surprisingly, the sharp and rapid rise is coupled with strong momentum. In other words, we continue to expect GBP to rise. The next level to monitor is 1.3320. We will maintain our view of a higher GBP provided that 1.3105 (‘strong support’ level was at 1.2970 last Friday) is not breached.”
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