In light of the recent price action, GBP/USD is now expected to meet the next up barrier at 1.2525 seconded by 1.2600, note UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang.
Key Quotes
24-hour view: “Our view of range trading in GBP was incorrect as it soared to a high of 1.2496. Strong upward momentum suggests further GBP strength and while it is likely to break above 1.2525, it might not be able to hold above this level. The next significant resistance level at 1.2600 is not expected to come into view today. On the downside, a break of 1.2445 (minor support is at 1.2470) would indicate that GBP is not strengthening further.”
Next 1-3 weeks: “Our latest narrative was from Monday (10 Apr, spot at 1.2425) wherein GBP is likely to consolidate between 1.2330 and 1.2520 for the time being. Yesterday (12 Apr), GBP soared to a high of 1.2496. Rapid improvement in momentum suggests GBP is ready to head higher. Resistance levels are at 1.2525 and 1.2600. On the downside, a break of 1.2400 (‘strong support’ level) would indicate that our view for a higher GBP is wrong.”