In the opinion of Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group, GBP/USD is now seen within the 1.2040-1.2260 range in the next few weeks.
24-hour view: “Our expectations for GBP to dip below 1.2015 yesterday were incorrect as it rebounded strongly to 1.2151 before closing on a firm note at 1.2141 (+0.68%). The rebound is likely to extend but a sustained rise above the major resistance at 1.2200 is unlikely. Support is at 1.2120, a breach of 1.2090 would indicate that GBP is not rebounding further.”
Next 1-3 weeks: “We highlighted yesterday (13 Feb, spot at 1.2050) that while downward momentum appears to be building, GBP has to break below the major support at 1.1960 before a sustained decline is likely. We added, ‘The chance of GBP breaking 1.1960 is low for the time being but it would increase as long as GBP does not rise above 1.2140 in the next few days’. GBP rose sharply to a high of 1.2151 in NY trade. The breach of our ‘strong resistance’ at 1.2140 indicates that GBP is not ready to head lower. Instead, GBP is likely to consolidate for now, expected to be between 1.2040 and 1.2260.”