GBP/USD is expected to edge further up in the short-term horizon, according to Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group.
24-hour view: The sharp rise in GBP to a high of 1.2562 yesterday came as a surprise (we were expecting it to trade in a range). While the rally appears to be overdone, it could extend even though the resistance at 1.2680 is highly unlikely to come into view today (there is another resistance at 1.2600). In order to keep the momentum going, GBP must stay above 1.2495 (minor support is at 1.2520).
Next 1-3 weeks: Yesterday (08 Jun, spot at 1.2445), we were of the view that GBP “is likely to consolidate between 1.2350 and 1.2550 for the time being”. We did not anticipate the strong surge in GBP that sent it above 1.2550 (high has been 1.2562). While GBP is likely to rise further, it remains to be seen if it has enough momentum to revisit last month’s high near 1.2680. On the downside, a breach of 1.2450 (‘strong support’ level) would indicate that 1.2680 is not coming into view.
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