The pound could now head towards the 1.3900 area in the coming weeks, forex strategists suggested in UOB Group.
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24-hour perspective: ‘Although we expected the pound to strengthen yesterday, we were of the opinion that 1.3800 was likely out of reach.’ The subsequent advance exceeded our expectations as GBP soared to 1.3833. The rapid rise appears to be running ahead of itself , but the pound could test 1.3860 first before relaxing. For today, the advance is unlikely to question the big resistance at 1.3900. The support is at 1.3800, followed by 1.3775. “
Next 1-3 weeks: “We have expected the pound to trade within a range of 1.3600 / 1.3830 since the end of last week. That said, we detected an improvement in short-term momentum and yesterday (Jul 26, pair at 1.3755), we note that there ruled out a break of 1.3830, but is unlikely to be able to sustain a foothold above this level. We do not anticipate the subsequent sharp rise during the New York hours to a high of 1.3833. Momentum to the upside has further improved and the pound is expected to trade an upside bias towards 1.3900. At the moment, the outlook for a sustained rise above 1.3900 is not high. On the downside, a gap of 1.3740 (‘strong support level’ would indicate that it is not ready to go up yet. “
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