May test resistance 1.3320 – UOB Group

Sterling (GBP) could strengthen further but does not appear to have enough momentum to reach major resistance at 1.3320, note UOB Group FX strategists Quek Ser Leang and Lee Sue Ann.

Bulls are set to break above 1.3320

24 HOUR VIEW: “We did not expect GBP to rise to a fresh 2½ year high of 1.3269 yesterday (we expected range trading). The rapid build-up momentum suggests further GBP strength today. However, GBP does not seem to have enough momentum to reach major resistance at 1.3320 (there is another resistance at 1.3295). To maintain momentum, GBP must not fall below 1.3215 with minor support at 1.3235.”

WEEKS 1-3: “The level to watch is 1.3320. After GBP rallied last Friday, we indicated on Monday (26 August, point at 1.3215) that “sudden and rapid growth is coupled with strong momentum”. We expected the GBP to continue rising and indicated that “the next level to watch is 1.3320″. There is no change in our view. Overall, only a breach of 1.3145 (the previous ‘strong support’ level at 1.3105) would mean that GBP strength has run its course.”