United Overseas Bank’s (UOB) Quek Ser Leang reports that GBP/USD failed to sustain its recent strong run, pulling back after testing resistance near 1.3410. Short-term price action now points to an extended correction with focus on 1.3330–1.3315 supports, while on a 1–3 week view a break below 1.3315 would signal that the Pound’s latest advance has ended.

Correction eyes 1.3315 strong support

"24-HOUR VIEW: After GBP rose more than we expected on Monday, we highlighted the following yesterday: “Strong momentum suggests further GBP strength toward 1.3410. A break above this major resistance is not ruled out, but based on the prevailing momentum, the next resistance at 1.3445 is likely out of reach. To sustain the momentum, GBP must hold above 1.3350, with minor support at 1.3370.” The subsequent price movements did not unfold as expected. GBP eked out a fresh high of 1.3401 before pulling back sharply to a low of 1.3349. The pullback has scope to extend, but it is currently unclear whether any decline can reach the strong support at 1.3315. Note that there is another support level at 1.3330. On the upside, resistance levels are at 1.3370 and 1.3390."

"1-3 WEEKS VIEW: We have held a positive GBP view since early last week. After GBP rose close to our technical target at 1.3410, we highlighted yesterday (07 Jul, spot at 1.3390) that “a break above 1.3410 will not be surprising and could lead to a move to 1.3445.” We did not expect GBP to pull back sharply, as it closed lower for the first time in eight days (1.3360, -0.23%). Upward momentum has slowed with the pullback, and a breach of 1.3315 (‘strong support’ level was at 1.3300 yesterday), would indicate that the advance in GBP has come to an end."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)