FX Strategists at UOB Group suggested the upside momentum in GBP/USD could extend to the 1.3220 area in the next weeks.

Key Quotes

24-hour view: “Our expectations for GBP consolidate yesterday were incorrect as it soared to 1.3156 before closing on a firm note at 1.3146 (+0.77%). The rapidly improving momentum is likely to lead to further GBP strength. In view of the overbought conditions, any advance in GBP is unlikely to challenge the major resistance at 1.3220 (minor resistance is at 1.3180). Support is at 1.3125 followed by 1.3090.”

Next 1-3 weeks: “The weak phase in GBP that started about 3 weeks ago has ended as GBP rose above our ‘strong resistance’ level of 1.3140. The strong rebound has room to extend to 1.3220. A break of 1.3220 is not ruled out but at this stage, the odds for a sustained rise above this level are not high. Overall, GBP is expected to trade on a firm footing as long as it does not move below 1.3040 within these few days.”