GBP/USD clings to the consolidative stance near term – UOB

According to UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang, GBP/USD is expected to maintain the 1.2000-1.2210 range in the next weeks.

Key Quotes

24-hour view: “The strong advance in GBP to a high of 1.2147 came as a surprise (we were expecting GBP to trade in a range). While overbought, the rapid rise could extend to 1.2165 before the risk of a pullback increases. The major resistance at 1.2210 is unlikely to come into view. Support is at 1.2065, followed by 1.2030.”

Next 1-3 weeks: “In our most recent narrative from Monday (20 Feb, spot at 1.2035), we indicated that ‘as long as the ‘strong resistance’ at 1.2100 is not breached within the next few days, there is still a slim chance for GBP to break below 1.1900’. Yesterday, GBP soared to a high of 1.2147. The breach of the ‘strong resistance’ level indicates that the weakness in GBP that started late last week (see annotations in the chart below) has ended. The current price movements appear to be part of a broad consolidation range and GBP is likely to trade between 1.2000 and 1.2210 for the time being.”