GBP/USD: A sustained advance can be expected above 1.3600 - UOB Group

Strong momentum suggests further Pound Sterling (GBP) strength against US Dollar (USD), even though it is unclear if this will be sufficient for a break above 1.3600. In the longer run, GBP must first close above 1.3600 before a sustained advance can be expected, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Strong momentum suggests further GBP strength

24-HOUR VIEW: "Yesterday, we expected GBP to 'trade in a range between 1.3435 and 1.3505.' However, GBP broke above 1.3505 and soared to 1.3559 before closing at 1.3544, up by 0.68%. Strong momentum suggests further GBP strength, even though it is unclear this will be sufficient for a break of the 1.3600 resistance. To maintain the momentum, GBP must not break below 1.3500 (minor support is at 1.3520)."

1-3 WEEKS VIEW: "Our latest narrative was from last Friday (30 May, spot at 1.3500), wherein 'the current price movements still appear to be part of a range trading phase, likely between 1.3400 and 1.3600.' Yesterday, GBP rose to 1.3559. There has been an increase in short-term upward momentum, but for a sustained advance, GBP must first close above 1.3600. The likelihood of GBP closing above 1.3600 will grow in the next few days as long as the 'strong support' level at 1.3470 is intact."