24-hour view: We expected GBP to break above 1.2950 yesterday. However, we highlighted that “it remains to be seen if there is enough momentum to carry GBP to the next major resistance at 1.3000.” In NY trade, GBP rose one pip above 1.3000 before closing on a firm note at 1.2990 (+0.45%). Conditions are severely overstretched, but only a breach of 1.2930 (minor support is at 1.2965) would indicate that the current upward pressure has faded. As long as 1.2930 is not breached, GBP could grind higher to 1.3035. The major resistance at 1.3100 is highly unlikely to come into view today. 

Next 1-3 weeks: Yesterday (12 Jul, spot at 1.2930), we highlighted that “the risk is for GBP to rise further.” We added, “if it breaks above 1.3000, the focus will shift to 1.3100”. In late NY trade, GBP rose to a high of 1.3001. While the focus is at 1.3100 now, severely overbought conditions suggest it may take a few days before this level comes into view. Overall, only a breach of 1.2885 (‘strong support’ level was at 1.2820 yesterday) would indicate that the GBP strength that started on Monday has come to an end.