GBP/USD improves the outlook and could retest 1.1760 – UOB

In the opinion of FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang, GBP/USD could extend the rebound to the 1.1760 region in the near term.

Key Quotes

24-hour view: “We highlighted yesterday that ‘the advance in GBP could extend to 1.1665’. We added, ‘the next resistance at 1.1700 is not expected to come into view’.  The anticipated advance exceeded our expectations as GBP surged to a high of 1.1710. While the rapid rise appears to be running ahead of itself, there is room for GBP to advance further to 1.1725 before easing. Support is at 1.1655 followed by 1.1630.”

Next 1-3 weeks: “Yesterday (12 Sep, spot at 1.1610), we noted that upward momentum has improved slightly. We held the view that GBP is likely to edge higher but the chance for a break of the major resistance at 1.1700 is not high. We did not expect the subsequent strong surge that led to a break of 1.1700 (high has been 1.1710). The rapid improvement in momentum is likely to lead to further GBP strength. The next resistance is at 1.1760. On the downside, the ‘strong support’ at 1.1580 (level was at 1.1520 yesterday) is likely to hold, at least for these couple of days.”