Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia at UOB Group now see GBP/USD navigating within the 1.2190/1.2380 range in the next few weeks.
Key Quotes
24-Hour View: “We highlighted last Friday that ‘GBP is likely to break above 1.2400 on the upside’. We added, ‘The next resistance at 1.2450 is a significant level and may not be easy to breach’. Although our view was not wrong as GBP rose above 1.2400 (high 1.2423), we did not foresee a sharp drop from the high. GBP may continue to decline today but oversold conditions suggest it is unlikely to break below 1.2260. At resistance 1.2330, a breach of 1.2355 would indicate that the current bearish pressure has eased.”
Next 1-3 Weeks: “Last Friday (March 31, spot at 1.2385), we felt that GBP was ‘likely to move above 1.2450’. GBP rose to a high of 1.2423 and then fell sharply from the high. In early Asian trade today, this took us to the ‘strong support’ level of 1.2300. A breach of 1.2300 indicates that GBP is not strengthening further. Although the immediate pressure is on the downside, we see any decline as part of the 1.2190/1.2380 range. In other words, we do not expect a clear break below 1.2190.”
