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GBP/USD could climb further to the 1.2850 region – UOB

2019-10-16 13:40    FXYEAH

In light of the recent price action, Cable could now visit the mid-1.2800s in the short-term horizon, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “The sudden surge in GBP that rocketed to an overnight high of 1.2800 came as a surprise. The outsized rally is running ahead of itself and while GBP could move above 1.2800, the odds for a rise beyond the next resistance at 1.2850 are not high for today. Support is at 1.2710 followed by 1.2670”.

Next 1-3 weeks: “While we have held a positive GBP view since last Friday (11 Oct, spot at 1.2425) wherein we indicated “the risk has shifted to the upside”, the pace and extent of GBP’s strength since then has exceeded our expectation considerably. On Monday (14 Oct, spot at 1.2615), we indicated that GBP “is likely attracted by the June’s peak of 1.2784” but instead of being “temporarily thwarted by the weekly declining trend line resistance at 1.2720”, GBP sliced through this level and rocketed to 1.2800 during NY hours. The current rally appears to be severely over-extended but in view of the impulsive momentum, further gain is not ruled out. From here, the next level to focus at is at 1.2850. After yesterday’s large gains, the ‘strong support’ level has moved markedly higher to 1.2530 from 1.2380. Only a break of the ‘strong support’ would indicate the current rally in GBP has run its course”.

GBP

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