GBP/USD could still grind lower and revisit the 1.2200 zone in the next weeks, suggested FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.

Key Quotes

24-hour view: “We highlighted yesterday that ‘the movement is likely part of a consolidation and we expect GBP to trade between 1.2280 and 1.2410’. While our view for consolidation was not wrong, GBP traded within a narrower range than expected (1.2292/1.2375). The underlying tone has weakened a tad and GBP could edge lower from here. That said, the chance for a break of the major support at 1.2250 is not high for now (minor support is at 1.2280). Resistance is at 1.2345 followed by 1.2385.”

Next 1-3 weeks: “There is not much to add to our update from yesterday (10 May, spot at 1.2325). As highlighted, while the risk is still on the downside, GBP GBP has to break clearly below 1.2250 before a move to 1.2200 is likely. On the upside, a breach of 1.2420 (‘strong resistance’ level was at 1.2450 yesterday) would indicate that GBP is not ready to break 1.2250.”