Pound Sterling (GBP) may edge higher and test the 1.3770 level against US Dollar (USD); the major resistance at 1.3800 is probably out of reach. In the longer run, outlook remains positive but GBP may consolidate for a couple of days first; the next technical objective is 1.3800, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
Outlook remains positive for GBP
24-HOUR VIEW: "We expected GBP 'to trade in a sideways range of 1.3670/1.3750' yesterday. Our assessment was not wrong, as GBP traded between 1.3675 and 1.3740, a narrower range than we expected. GBP closed slightly higher at 1.3730, up 0.11%. Despite trading sideways, there has been a slight increase in upward momentum. Today, GBP may edge higher and test the 1.3770 level. Barring a surge in momentum, the major resistance at 1.3800 is probably out of reach. Support levels are at 1.3710 and 1.3680."
1-3 WEEKS VIEW: "We turned positive on GBP last Thursday. On Friday, we highlighted that 'the outlook for GBP remains positive, but it may consolidate for a couple of days first; the next technical objective is 1.3800.' We will maintain this view as long as the ‘strong support’ at 1.3645 (level previously at 1.3610) is not breached."
