Further gains in GBP/USD depend on a breakout of the 1.1440 level in the near term, suggest UOB Group’s Markets Strategist Quek Ser Leang and Economist Lee Sue Ann.
24-hour view: “We expected GBP to ‘trade sideways between 1.1280 and 1.1440’. GBP subsequently traded within a range of 1.1257/1.1410 before closing at 1.1319 (-0.34%). The price movements still appear to be part of a consolidation and we expect GBP to trade between 1.1260 and 1.1420 for today.”
Next 1-3 weeks: “There is no change in our view from yesterday (18 Oct, spot at 1.1355) wherein the risk for GBP remains on the upside but it has to break clearly above 1.1440 before further sustained advance is likely. The next resistance above 1.1440 is at 1.1500. Overall, only a break of 1.1220 (no change in ‘strong support’ level from yesterday) would indicate that GBP is not strengthening further.”