GBP/USD moved into a consolidative phase – UOB

FX Strategists at UOB Group now see GBP/USD navigating within the 1.2100/1.2400 range in the next weeks.

Key Quotes

24-hour view: “While we expected GBP to strengthen yesterday, we held the view that ‘1.2270 is unlikely to come into the view’. The subsequent advance in GBP exceeded our expectation as it surged to a high of 1.2296. Despite the relatively strong rise, upward momentum has not improved by as much. That said, there is scope for the current GBP strength to test 1.2310 first before a more sustained pull-back can be expected. For today, a move beyond 1.2350 would come as a surprise. Support is at 1.2230 followed by 1.2200.”

Next 1-3 weeks: “GBP took out 1.2230 ‘key resistance’ and as highlighted yesterday (19 May, spot at 1.2205), a break of this level would indicate that the weak phase that started earlier last week (see annotations in chart below) has run its course. The current movement is viewed as the early stages of a consolidation phase. For the next couple of weeks, GBP is likely to trade sideways within a relatively broad range of 1.2100/1.2400.”