GBP/USD: Further gains seen above 1.2510 – UOB

According to UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang, the upside momentum in GBP/USD is likely to accelerate once 1.2510 is cleared.

Key Quotes

24-hour view: “We expected GBP to edge upwards yesterday but we indicated that ‘any advance is viewed as a higher trading range of 1.2405/1.2475’. While our view for GBP to advance was correct, it strengthened more than expected as it rose to a high of 1.2486. GBP extended its advance in early Asian trade but while it could rise above 1.2510, overbought conditions suggest that it might not be able to break clearly above the month-to-date high of 1.2545 today (next resistance is at 1.2600). Support is at 1.2465; a break below 1.2440 would indicate that the current upward pressure in GBP has eased.”

Next 1-3 weeks: “Our latest narrative was from last Friday (21 Apr, spot at 1.2435) wherein the recent downward pressure has faded and GBP is likely to trade sideways between 1.2345 and 1.2510. Yesterday, GBP rose to a high of 1.2486 and upward momentum is building rapidly. A break of 1.2510 will not be surprising and will increase the odds for further GBP strength in the coming days. Overall, we expect GBP to trade with an upward bias as long as it does not break below 1.2415. Looking ahead, resistance levels are at 1.2545 and 1.2665.”