Prospects for another test of 1.1976 in GBP/USD now looks out of favour for the time being, suggested FX Strategists at UOB Group Quek Ser Leang and Peter Chia.

Key Quotes

24-hour view: “The current movement in GBP is likely part of a consolidation phase. For today, GBP is likely to consolidate and trade between 1.2080 and 1.2175.”

Next 1-3 weeks: “We turned negative on GBP in the middle of last week. In our latest narrative from last Friday (31 Jul, spot at 1.2160), we highlighted that downward momentum is beginning to wane and a break of the ‘strong resistance’ at 1.2205 would indicate that 1.2040 is out of reach. We did not quite anticipate the sharp sell-off to 1.1976 and the subsequent strong rebound. Downward momentum has waned further and the chance for GBP to move below 1.1976 is not high. That said, only a break of 1.2205 (no change in ‘strong resistance’ level) would indicate that the weak phase has come to an end.”