GBP/USD: 1.3000 might not come into view so soon – UOB Group

The Pound Sterling (GBP) could pullback, but any decline is unlikely to threaten the support at 1.2915. Risk remains on the upside; overbought conditions suggest 1.3000 might not come into view so soon, UOB Group FX analysts Quek Ser Leang and Lee Sue Ann note.

All eyes on 1.3000

24-HOUR VIEW: “After GBP rose sharply last Thursday, we indicated on Friday that ‘the overbought advance could extend to 1.2970 before a pullback can be expected.’ We also indicated that ‘the next major resistance at 1.3000 is unlikely to come into view.’ GBP then advanced more than expected, reaching a high of 1.2991. GBP closed at 1.2990 but opened lower today. The advance remains overbought, and GBP is unlikely to rise further. Today, it could pullback, but any decline is unlikely to threaten the support at 1.2915 (minor support is at 1.2940). Resistance levels are at 1.2985 and 1.3000.”

1-3 WEEKS VIEW: “We have held a positive view in GBP since early this month. Last Friday (12 Jul, spot at 1.2925), we pointed out that ‘the risk remains on the upside, but overbought conditions suggest 1.3000 might not come into view so soon.’ GBP subsequently rose to 1.2991. While overbought short-term conditions could lead to a slight pullback within these 1 to 2 days, as long as 1.2870 (‘strong support’ level was at 1.2855 last Friday) is not breached, there is still a chance for GBP to rise to 1.3000.”