GBP/USD is expected to trade within 1.2470 and 1.2670 for the time being, noted FX Strategists at UOB Group Quek Ser Leang and Peter Chia.
24-hour view: “We highlighted last Friday that ‘the rapid advance appears to be running ahead of itself and GBP is unlikely to strengthen much further’ and we expected GBP to ‘trade between 1.2510 and 1.2610’. GBP subsequently rose to 1.2590 before dropping sharply to 1.2486. Downward momentum has improved somewhat and GBP could dip below the support at 1.2470. The next support at 1.2430 is unlikely to come under threat. Resistance is at 1.2520 followed by 1.2545.”
Next 1-3 weeks: “Last Friday, we highlighted that the outlook for GBP is mixed and we expected it to trade between 1.2470 and 1.2670. There is no change in our view for now even though the underlying tone has softened and GBP could dip below the support at 1.2470. Looking ahead, GBP has to close below 1.2430 before a sustained decline is likely.”
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