GBP/USD Rally May Stall Near Resistance Level

The British Pound (GBP) has experienced significant volatility in its trading against the US Dollar (USD), according to a recent analysis from United Overseas Bank's (UOB) Quek Ser Leang. The pair surged from 1.3401 to 1.3481 last Friday, with potential for further gains up to 1.3520, but overbought conditions may limit its upside.

Quek notes that the GBP/USD has been in a relatively volatile session, with a sharp rise that could potentially extend, but overbought conditions might restrict any gains to around 1.3520. The major resistance at 1.3555 is not expected to be reached, and support lies at 1.3450, with a breach of 1.3425 indicating eased upward pressure.

Looking ahead to the next 1-3 weeks, Quek believes that strong momentum will continue, but it remains uncertain whether the GBP can break and hold above the significant resistance at 1.3555. To sustain this momentum, the GBP must hold above its 'strong support' level at 1.3385.