GBP/USD could extend the rebound to the 1.3220 area in the near term according to FX Strategists at UOB Group.

Key Quotes

24-hour view: “We highlighted yesterday that ‘further GBP strength is likely but any advance is unlikely to challenge the major resistance at 1.3220’. Our view was not wrong as GBP rose to 1.3211, dropped sharply to 1.3088 before snapping back up. Despite the rapid swings, the underlying tone appears firm and we see chance for GBP to test 1.3220. However, a sustained rise above this level appears unlikely for now (next resistance is at 1.3280). Support is at 1.3145 followed by 1.3110.”

Next 1-3 weeks: “Yesterday (17 Mar, spot at 1.3150), we indicated that the recent weak phase has ended and we held the view that the rebound in GBP has scope to extend to 1.3220. GBP subsequently popped to 1.3211 before pulling back. There is no change in our view for now even though the chance for a sustained rise above 1.3220 has increased. The next resistance above 1.3220 is at 1.3280. Overall, GBP is expected to trade on a firm footing as long as it does not move below 1.3070 (‘strong support’ level was at 1.3040 yesterday).”