There is scope for GBP/USD to revisit the key 1.3000 mark in the next few weeks, suggest, Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group.
Key Quotes
24-hour view: We highlighted yesterday that “there is room for GBP to rise further.” We added, “1.2950 is unlikely to come into view.” Our view turned out to be correct, as GBP rose to 1.2932 before closing on a firm note at 1.2931 (+0.55%). While the advance appears to be overstretched, there is no sign of weakness just yet. Today, GBP is likely to break above 1.2950, but it remains to be seen if there is enough momentum to carry GBP to the next major resistance at 1.3000. To keep the momentum going, GBP must not break below 1.2870 (minor support is at 1.2900).
Next 1-3 weeks: Yesterday (11 Jul), when GBP was trading at 1.2860, we indicated that GBP “is likely to break above 1.2900,” We added, “further advance is not ruled out, but 1.3000 may not come into view so soon.” In line with our expectations, GBP broke above, as it rose to a high of 1.2932. Not surprisingly, upward momentum has improved even though the rapid rise over the past few days appears to be a bit “overstretched”. That said, as long as GBP stays above 1.2820 (‘strong support’ level was at 1.2750 yesterday), the risk is for GBP to rise further. Looking ahead, if GBP breaks above 1.3000, the focus will shift to 1.3100.