In opinion of FX Strategists at UOB Group, the likeliness of GBP/USD advancing beyond 1.3645 in the near term could be losing momentum.

Key Quotes

24-hour view: “Last Friday, we highlighted that ‘the overbought advance in GBP has scope to extend above 1.3645 but the next major resistance at 1.3680 is likely out of reach’. The subsequent advance fell short of our expectations as GBP rose to 1.3640 before staging a surprising sharp pullback to 1.3575. Upward pressure has dissipated and GBP is likely to consolidate and trade between 1.3560 and 1.3630 for today.”

Next 1-3 weeks: “Our latest narrative was from last Thursday (17 Feb, spot at 1.3585) where we highlighted that upward momentum is building but GBP has to close above 1.3645 before a sustained advance is likely. Last Friday (18 Feb), GBP rose to 1.3640 before pulling back sharply. The chance for GBP to move clearly above 1.3645 has diminished and a breach of 1.3545 (no change in ‘strong support level) would indicate that GBP is not ready to head above 1.3645.”