GBP/USD next resistance is at 1.3655 – UOB

FX Strategists at UOB Group sees the upside momentum in Cable facing strong resistance in the mid-1.3600s.

Key Quotes

“While we highlighted last Friday that the “focus has shifted back to 1.3445” and that the “next significant resistance level above 1.3445 is closer to 1.3600”, the strong, sharp and impulsive rally came as a surprise (thanks to the bullish comments from the usually dovish MPC member Vlieghe)”.

“The 1.3616 high registered on Friday is not far away from the 3-year declining trend-line on the weekly chart at 1.3655. Based on the impulsive momentum, a move above this level would not be surprising but the next trend-line at 1.3835 which coincides with the Feb 2016 low may not be so easy to crack”.

“Overall, only a move back below 1.3440 (stop-loss level adjusted higher from 1.3250) would indicate that the current bullish phase has ended (minor support is at 1.3500)”.