United Overseas Bank strategists Quek Ser Leang and Lee Sue Ann report that GBP/USD has rebounded strongly from recent lows, invalidating the earlier downside bias. The British Pound is now expected to grind higher toward nearby resistance, though gains are seen as gradual and conditional on holding key support levels, with a clearer push to higher targets requiring a decisive break of initial caps.
Pound Targets 1.3420 Then 1.3450
24-hour view: Two days ago, GBP declined to a low of 1.3274 and then rebounded strongly. When GBP was at 1.3330 yesterday, the immediate downward pressure had eased, with the pair likely to range-trade between 1.3295 and 1.3350. GBP subsequently dipped to 1.3299 before staging a sharp rise, reaching a high of 1.3383. While the sharp rise appears excessive, GBP could continue to rise and test 1.3420. The next resistance at 1.3450 is unlikely to come under threat. Support is at 1.3355; a breach of 1.3340 would indicate that the immediate upward pressure has eased.
1–3 week view: Two days ago (28 Oct, spot at 1.3310), the bias for GBP was on the downside toward 1.3265. GBP then declined to a low of 1.3274 before rebounding, and subsequently broke above the key strong resistance level at 1.3365. Downward pressure has eased with that break, and upward momentum is building, albeit tentatively. GBP is expected to rise toward 1.3420, but must break clearly above that level before a move to 1.3450 can be expected. To sustain the momentum buildup, GBP must hold above the strong support level, now at 1.3310.
