GBP: Upside Against USD Remains Above 1.3605 - UOB

UOB analysts Quek Ser Leang and Lee Sue Ann maintain a positive 1-3 week outlook for GBP/USD, with the 1.3700 target still achievable as long as the pair holds above 1.3605. At the time of writing, GBP/USD is trading at 1.36322.

**Short-Term Momentum Still Biased to the Upside**

According to UOB analysis, GBP/USD continues to find support after breaking through key resistance, with the short-term trading range likely confined between 1.3605 and 1.3670. Market data shows that over the past two days, sterling rose to near 1.3630, closing up 0.19% at 1.3632, indicating that upward momentum persists. A break above 1.3655 would be seen as a signal of accelerating upside momentum.

**Prerequisites for the 1.3700 Target**

UOB emphasizes that over the next 1-3 weeks, sterling is expected to continue advancing toward 1.3700, provided it holds above the strong support level of 1.3570. However, technical indicators show a coexistence of overbought conditions and negative momentum divergence, suggesting limited upside potential. Analysts previously predicted resistance at 1.3600 on August 17, which was adjusted to 1.3655 on August 19.

**Longer-Term Picture Remains Range-Bound**

Despite a clear short-term bullish bias, UOB notes that longer-term signals still point to range-bound trading. This implies that even if sterling approaches 1.3700, the sustainability of further breakouts remains to be seen. Market expectations suggest an elevated upside risk premium for GBP/USD above the key support level of 1.3570.