GBP/USD: Set to test and possibly break above 1.3595 – UOB Group
Pound Sterling (GBP) could test and possibly break above 1.3595, but it is unlikely to be able to maintain a foothold above this level. In the longer run, slight increase in upward momentum is not sufficient to indicate a sustained rise; GBP must first break and close above 1.3595, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
Upward momentum is not sufficient for a sustained rise
24-HOUR VIEW: "GBP traded in a 1.3524/1.3567 range two days ago. Yesterday, we highlighted that 'flat momentum indicators suggest GBP is likely to range-trade today, expected to be between 1.3500 and 1.3570.' GBP traded in a wider range than expected (1.3495/1.3583) and then closed at 1.3573 (+0.32%). There has been a slight increase in upward momentum. Today, there is a chance for GBP to test the major resistance at 1.3595. A break above this level is not ruled out, but based on the current momentum, GBP is unlikely to be able to maintain a foothold above this level. Support is at 1.3550; a breach of 1.3535 would indicate that the current mild upward pressure has eased."
1-3 WEEKS VIEW: "Our most recent narrative was from Monday (08 Sep, spot at 1.3480), in which we highlighted that 'the current price movements are likely part of a broad range between 1.3430 and 1.3595.' Yesterday, GBP rose and approached 1.3595, reaching a high of 1.3583. There has been a slight increase in upward momentum, but it is not sufficient to indicate a sustained rise just yet. GBP must break and hold above 1.3595 before a move toward 1.3635 can be expected. The odds of a clear break above 1.3595 are not high, but they will remain intact as long as the ‘strong support’ level at 1.3510 is not breached."