It is unlikely to touch major resistance at 1.3400 – UOB Group

The British pound (GBP) could rise but is unlikely to reach major resistance at 1.3400. In the longer term, there has been only a slight increase in momentum and it remains to be seen whether GBP can break above 1.3400, note UOB Group FX analysts Quek Ser Leang and Peter Chia.

To remain bullish above 1.3250

24 HOURS: “Yesterday, we expected GBP to trade in a range between 1.3270 and 1.3340. We did not anticipate the volatility that followed as the GBP fell sharply but briefly to 1.3249 before returning to a high of 1.3360. Despite the strong advance from the low, the upside momentum did not build much. Today, GBP could rise but is unlikely to reach major resistance at 1.3400 (there is another resistance at 1.3370). The support is at 1.3325; a break of 1.3300 would indicate that the current upside pressure is gone.”

WEEKS 1-3: “We have had a positive view on the GBP since the start of last week (see chart annotations below). In our last story last Friday (September 20 at 1.3280), we pointed out that “while price action continues to suggest GBP strength, overbought conditions could limit any further advance.” I added, “the next level to watch is 1.3350”. Yesterday (September 23rd at 1.3310), we indicated that “while GBP could rise above 1.3350, the potential for it to reach 1.3400 looks low for now.” GBP later rose to 1.3360. There was only a slight increase in momentum and it remains to be seen if GBP can break above the significant resistance at 1.3400. On the downside, if GBP were to break below 1.3250 (the previous ‘strong support’ level at 1.3210), it would mean that it is not consolidating further.”