GBP/USD could still attempt a move above 1.2700 – UOB

In the opinion of UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang, there is still probability of GBP/USD to break above 1.2700 in the near term.

Key Quotes

24-hour view: “We highlighted yesterday that ‘the price actions appear to be part of a consolidation’ and we expected GBP to ‘trade in a range between 1.2585 and 1.2655’. GBP traded in a relatively quiet manner until early NY trade when it popped briefly to 1.2679 and then dropped back down quickly to end the day little changed at 1.2627 (+0.04%). The price movements still appear to be part of consolidation and today, we expect GBP to trade in a range of 1.2580/1.2680.”

Next 1-3 weeks: “We turned positive in GBP last Friday (06 May, spot at 1.2575). After GBP rose to a high of 1.2668, in our latest narrative from Tuesday (09 May, spot at 1.2615), we indicated that ‘overbought short-term conditions suggest GBP could stay below the recent high of 1.2668 for 1-2 days’. Yesterday (10 May), GBP popped briefly to a fresh 1-year high of 1.2679 before dropping back down to close largely unchanged at 1.2627 (+0.04%). The brief advance to 1.2679 did not improve the upward momentum. However, as long as 1.2540 (no change in ‘strong support’ level) is not breached, there is still chance, albeit not a high one, for the GBP strength to extend to 1.2720 before the risk of a pullback increases.”