UOB Group’s Economist Lee Sue Ann and Market Strategist Quek Ser Leang suggest GBP/USD could accelerate its gains and revisit 1.2330 in the short term. Yesterday, we highlighted that ‘the price actions appear to be consolidative’ and we expected GBP to ‘trade sideways within a range of 1.2100/1.2200’. Our view for sideways trading turned out to be correct as GBP traded between 1.2102 and 1.2176 before closing little changed at 1.2151 (+0.01%).
While GBP may continue to trade sideways today, a breach of the 1.2200 resistance could potentially lead to a sharp rise to 1.2270. Support is at 1.2100, followed by a strong level at 1.2050.
There is not much to add to our update from two days ago (10 Jan, spot at 1.2180). As highlighted, after the sharp advance in GBP earlier this week, the odds of GBP breaking the resistance at 1.2270 have increased. The GBP strength is intact as long as it does not break the ‘strong support’ at 1.2050 (level was at 1.2030 yesterday).
