Key Moments
- UOB Group analysts maintain that the bias for GBP/USD is still tilted to the upside.
- Overbought conditions suggest limited potential for a sustained move above 1.3525 in the near term.
- Key resistance is highlighted at 1.3570, while the upside view holds as long as GBP stays above 1.3430.
Short-Term Trading Outlook
The risk backdrop for Pound Sterling (GBP) against the US Dollar (USD) continues to favor further gains, although UOB Group’s FX strategists Quek Ser Leang and Peter Chia emphasize uncertainty around the pair’s ability to overcome key resistance at 1.3570.
In their 24-hour view, the analysts recalled their prior assessment: “Following GBP’s price action two days ago, we highlighted the following yesterday: ‘There has been no shift in either downward or upward momentum, and we continue to expect range-trading today, most likely between 1.3400 and 1.3460’.” That expectation was challenged when GBP/USD briefly traded down to 1.3402 before rebounding sharply and pushing just above a major resistance level at 1.3505, reaching an intraday high of 1.3507.
They noted that further short-term strength in GBP cannot be ruled out, but described conditions as “deeply overbought,” which in their view makes “a sustained break above 1.3525” unlikely. The analysts also stated that the high registered earlier in the month, “near 1.3570, is not expected to come into view.” On the downside, they identified firm intraday support at 1.3460, with minor support positioned at 1.3480.
| Level | Type | Commentary |
|---|---|---|
| 1.3570 | Resistance | High seen earlier in the month; significant resistance level |
| 1.3525 | Resistance | Analysts see a sustained break above this level as unlikely in current conditions |
| 1.3505 | Resistance | Major resistance; recent high reached at 1.3507 |
| 1.3480 | Support | Minor support in the near-term view |
| 1.3460 | Support | Firm support level for the 24-hour horizon |
| 1.3430 | Support | Key level to maintain upside bias in the 1-3 weeks view |
Medium-Term Technical Perspective (1-3 Weeks)
From a broader 1- to 3-week perspective, the analysts referred back to their earlier commentary from “two days ago (21 Jan, spot at 1.3440)” where they stated that “the near-term bias is tilted to the upside toward 1.3505, but based on the current momentum, GBP may not break clearly above this level.” That view was tested when GBP/USD advanced rapidly to 1.3507 in the latest session.
They observed that the swift move higher indicates that “the risk for GBP remains on the upside,” but added that “it is unclear for now whether upward momentum is strong enough to break above the significant resistance at 1.3570.” The analysts explained that this constructive bias for GBP will persist as long as the pair trades above 1.3430, noting that this “‘strong support’ level previously [stood] at 1.3380.”
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