GBP/USD may break this year’s high at 1.3270 – UOB Group

The British Pound (GBP) is likely to trade sideways between 1.3120 and 1.3210. In the longer term, the build-up in momentum is likely to lead to further strength in the GBP, potentially surpassing this year’s high near 1.3270, note UOB Group FX analysts Quek Ser Leang and Lee Sue Ann.

GBP limit for now

24 HOUR VIEW: “After GBP rallied two days ago, I indicated yesterday that ‘while the sudden advance appears to be overdone, there is room for GBP to rise to 1.3240 before settling.’ GBP later rose less than expected to 1.3229 before pulling back surprisingly sharply to 1.3147. The pullback appears to be ahead of itself and the GBP is unlikely to weaken much further. Today, GBP is more likely to trade sideways between 1.3120 and 1.3210.”

WEEKS 1-3: “Two days ago the GBP surged. Yesterday (September 17th at 1.3210), we pointed out that “building momentum is likely to lead to further GBP strength, potentially breaking this year’s high near 1.3270”. I added: “should the GBP break below 1.3120, it would mean that the momentum build-up has faded.” GBP then rose to 1.3229 before falling sharply to 1.3163. Although the upward momentum has slowed, we continue to have the same view for now.”