GBP/USD could now trade between 1.2230 and 1.2460 in the next weeks, suggested FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.

Key Quotes

24-hour view: “Our expectations for the ‘overbought rally in GBP to extend’ were incorrect as it staged a surprisingly sharp sell-off to a low of 1.2330. The sharp decline has scope to dip below 1.2300 but is not expected to threaten the next support at 1.2230. On the upside, a breach of 1.2405 (minor resistance is at 1.2375) would indicate that the current downward pressure has eased.”

Next 1-3 weeks: “After GBP surged to a high of 1.2498, we highlighted yesterday that there is room for GBP to advance further to 1.2600. We did not expect the rapid and sharp turnaround as GBP plummeted to a low of 1.2330 during NY session. The volatile price actions have resulted in a mixed outlook and GBP could trade between 1.2230 and 1.2460 for now.”