GBP/USD faces a potential test of the 1.2330 level – UOB

If GBP/USD breaks above 1.2270, it could then attempt to revisit the 1.2330 zone, note UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang.

Key Quotes

24-hour view: “Yesterday, we held the view that GBP ‘could continue to rise even though 1.2200 is likely out of reach’. The anticipated GBP strength exceeded our expectations as GBP rose to a high of 1.2209. While overbought, there is room for one more push higher in GBP before the risk of a pullback increases. That said, a break of the major resistance at 1.2270 is unlikely today (there is another resistance at 1.2240). On the downside, the support at 1.2095 is unlikely to come under threat (minor support is at 1.2150).”

Next 1-3 weeks: “We highlighted yesterday (09 Jan, spot at 1.2105) that GBP could rise further but it remains to be seen if it can build enough momentum to reach 1.2270. While there is no change in our view, after the strong advance yesterday, the odds for a break of 1.2270 have increased. The next resistance level above 1.2270 is at 1.2330. The GBP strength is intact as long as it does not break the ‘strong support’ at 1.2030 (level was at 1.1950 yesterday).”