United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann note that GBP/USD has surged to a two‑month high, with deeply overbought conditions but scope for further gains. Intraday, upside is seen limited to a test of 1.3560 while holding above 1.3480. On a 1–3 week view, renewed momentum suggests the Pound has resumed its advance, with 1.3590 the level to monitor and strong support at 1.3450.

Overbought Pound still has upside scope

"24-HOUR VIEW: We did not expect GBP to surge to a high of 1.3556 yesterday (we had expected range-trading). The sharp rally appears excessive, but with no sign of pause yet, GBP could continue to rise. However, given the deeply overbought conditions, any advance could be limited to a test of 1.3560. The major resistance at 1.3590 is unlikely to come under threat. To sustain the overbought momentum, GBP must not break below 1.3480 (minor support is at 1.3510)."

"1-3 WEEKS VIEW: Our most recent narrative was from Monday (13 Jul, spot at 1.3375), when we highlighted that “the GBP advance from late last month has ended.” We also highlighted that “for the time being, we expect GBP to trade in a range between 1.3320 and 1.3445.” In a sudden move yesterday, GBP lifted off and broke above 1.3445, surging to a high of 1.3556. The renewed upward momentum suggests that GBP has resumed its advance. That said, short-term conditions are deeply overbought, and the pace of any further advance is likely to be slower. The level to monitor is 1.3590. We will maintain a positive GBP stance as long as it holds above the ‘strong support’ level, currently at 1.3450."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)