In opinion of Lee Sue Ann and Quek Ser Leang, FX Strategists at UOB Group, further upside momentum in GBP/USD should meet a tough hurdle around 1.2400 in the near term.

Key Quotes

24-hour view: “GBP rose to a high of 1.2329 yesterday before closing on a firm note at 1.2321, up by 0.51%. Upward pressure is beginning to build and GBP could extend its gains from here. That said, the major resistance at 1.2400 is not expected come into the picture (1.2370 is already quite a strong resistance level). Support is at 1.2300 followed by 1.2270.”

Next 1-3 weeks: “GBP dropped to 1.2156 last Friday before rebounding strongly. The recent weak phase has come to an end and there is room for the current rebound to extend. However, any advance is expected to face strong resistance at 1.2400. On the downside, a breach of 1.2220 would indicate that the build-up in upward pressure has eased.”