GBP/USD now looks at 1.2440 – UOB

A more sustained advance in GBP/USD is seen once 1.2550 is cleared, suggest UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang.

Key Quotes

24-hour view: “GBP gave up most of its strong gains from last Friday as it dropped and closed lower by 0.59% (1.2495). Downward momentum is building and the bias for GBP today is tilted to the downside. However, it is unlikely to break the strong support at 1.2440 (minor support is at 1.2470). On the upside, a breach of 1.2540 (minor resistance is at 1.2515) would indicate that the current mild downward pressure has eased.”

Next 1-3 weeks: “In our most recent narrative from last Thursday (27 Apr, spot at 1.2470), we highlighted that ‘in order for GBP to advance in a sustained manner, it has to break and stay above 1.2550’. GBP took out 1.2550 last Friday, rose to 1.2584 before falling back down yesterday to close at 1.2495. Upward momentum has improved, albeit not much. For GBP to strengthen further, it must not fall below the ‘strong support’ level, currently at 1.2440. Looking ahead, if GBP can surmount 1.2585, the focus will shift to 1.2665.”