GBP/USD closed at 1.3678, with expectations for consolidation between 1.3620 and 1.3715. The report indicates that while there was a recent upward movement, conditions remain overbought, suggesting limited further advances. The next resistance levels are at 1.3715 and 1.3725. UOB Group Senior Technical Strategist Quek Ser Leang and Economist Lee Sue Ann notes.
GBP likely to consolidate
“24-HOUR VIEW: While we expected GBP to strengthen yesterday, we highlighted that “given the deeply overbought conditions, any advance is likely part of a higher range of 1.3590/1.3700.” We also highlighted that GBP “is unlikely to break clearly above 1.3700.” The subsequent price movements did not turn out as expected. GBP edged to a high of 1.3713 before easing to close at 1.3678, up by 0.22%. There has been no further increase in upward momentum, and with conditions still overbought, we expect GBP to consolidate today, most likely between 1.3620 and 1.3715. “
“1-3 WEEKS VIEW: Our update from yesterday (26 Jan, spot at 1.3660) still stands. As highlighted, the recent price action “continues to suggest a higher GBP, and the levels to watch are 1.3725 and 1.3790.” We added, “given the deeply overbought conditions, it remains to be seen if 1.3790 is within reach.” Overall, only a breach of 1.3560 (‘strong support’ level was at 1.3540 yesterday) would indicate that the advance from the middle of last week (see annotations in the chart below) has come to an end.”
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)