According to FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang, GBP/USD is now expected to navigate within the 1.2520/1.2720 range in the next weeks.

Key Quotes

24-hour view: “We expected GBP to ‘trade sideways within a range of 1.2460/1.2555’ yesterday. GBP dropped to 1.2453 during NY session before lifting off and rocketed to a high of 1.2638. While the rapid rise appears to be overdone, GBP could advance to 1.2660 first before easing. The major resistance at 1.2730 is not expected to come under threat. Support is at 1.2595 followed by 1.2560.”

Next 1-3 weeks: “We highlighted yesterday (04 May, spot at 1.2500) that there is still chance, albeit not a high one for GBP drop below last week’s low near 1.2410. However, GBP jumped above our ‘strong resistance’ level at 1.2600 (high of 1.2638). The break of the ‘strong resistance’ level indicates that the downside risk has dissipated. The current movement appears to be the early stages of a consolidation phase. In other words, GBP is likely to trade sideways for now, expected to be within a range of 1.2520/1.2720.”