GBP/USD: Overbought conditions could limit any advance to a test of 1.2715 – UOB Group

Strong momentum suggests further Pound Sterling (GBP) strength; overbought conditions could limit any advance to a test of 1.2715. In the longer run, outlook has shifted from negative to positive; any advance is likely a recovery, potentially testing the resistance at 1.2755, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

GBP can potentially test the resistance at 1.2755

24-HOUR VIEW: “Our view for GBP to trade in a range yesterday was incorrect. Instead of trading in a range, GBP surged, closing higher by 0.89% at 1.2679, its biggest 1-day gain since late Aug. Strong momentum suggests further GBP strength, even though deeply overbought conditions could limit any advance to a test of 1.2715. The major resistance at 1.2755 is likely to be out of reach for now. On the downside, any intraday pullback is expected to face strong support at 1.2620, with minor support at 1.2640.”