In the opinion of FX Strategists at UOB Group Quek Ser Leang and Peter Chia, GBP/USD is now seen trading between 1.2530 and 1.2640 in the next weeks.

Key Quotes

24-hour view: “We expected GBP to ‘trade sideways between 1.2585 and 1.2660’ yesterday. GBP subsequently dropped to 1.2561 before rebounding. The movement appears to be part of a consolidation and GBP is likely to trade between 1.2565 and 1.2640 for today.”

Next 1-3 weeks: “On Monday (30 May, spot at 1.2625), we highlighted that while upward momentum has not improved by much, the risk for GBP is on the upside towards 1.2700. Yesterday (31 May), GBP dropped to within 1 pip of our ‘strong support’ level of 1.2560 (low of 1.2561) before rebounding. While there is no clear break of our ‘strong support’ level, upward momentum has more or less dissipated. From here, GBP is likely to consolidate and trade between 1.2530 and 1.2670 for several days before making another attempt to move to 1.2700.”