In the view of FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang, GBP/USD could extend the upside further and revisit the 1.2700 area.

Key Quotes

24-hoour view: “We highlighted yesterday that ‘there is barely any improvement in upward momentum’ and we expected GBP to ‘trade sideways within a range of 1.2580/1.2665’. GBP subsequently traded within a narrower range than expected (1.2617/1.2660). The quiet price actions suggest further sideway-trading is likely, expected to be between 1.2585 and 1.2660.”

Next 1-3 weeks: “Our view from yesterday (30 May, spot at 1.2625) still stands. As highlighted, while upward momentum has not improved by much, the risk for GBP is on the upside towards 1.2700. Overall, only a break of 1.2560 (‘strong support’ level was at 1.2540 yesterday) would indicate that the upside risk has dissipated. Looking ahead, the next resistance above 1.2700 is a rather solid level at 1.2740.”