GBP: Upside bias points to 1.3700 — UOB

UOB analysts Quek Ser Leang and Lee Sue Ann note that the upside bias for GBP/USD remains intact, targeting the 1.3700 level. The pair is currently trading around 1.36368, having earlier fluctuated within a 1.3615-1.3660 range, with momentum indicators showing neutrality.

**Short-term momentum and key support**

The analysts highlight that over the next 1 to 3 weeks, as long as GBP holds above the strong support at 1.3570, the upward momentum is expected to persist, with a challenge toward the major resistance at 1.3700. Although GBP rose to 1.3630 and closed higher over the past two days, indicating ongoing upward momentum, technical indicators have flashed overbought conditions and negative momentum divergence, suggesting limited room for further upside in the short term. A clear break above 1.3655 would be seen as a signal of accelerating upward momentum.

**Intraday range and breakout conditions**

From an intraday perspective, GBP/USD is likely to be confined within a 1.3605-1.3670 range. Market signals suggest that even if the pair breaks above the upper end of this range, reaching the major resistance at 1.3700 in the short term remains challenging. On the support side, aside from the key level at 1.3570, 1.3605 serves as minor support in the near term. Overall, as long as GBP stays above 1.3570, its constructive outlook remains unchanged, though the upward path may be accompanied by volatility.

**Outlook evolution and market context**

UOB's view on GBP has undergone rapid adjustments over the past week. As previously reported, the bank's analysts forecast resistance at 1.3600 on August 17, then revised it up to 1.3655 on August 19, a level that has now been surpassed. This series of adjustments reflects that, despite overbought concerns on the technical front, the resilience shown in GBP's actual price action has continued to reinforce the analysts' bullish bias.