Further advance in GBP/USD remains on the cards, although a test of 1.1300 seems out of favour for the time being, note FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.

 Key Quotes

24-hour view: “We highlighted last Friday that GBP ‘could continue to rise but a sustained advance above 1.1300 is unlikely’. However, GBP plummeted from a high of 1.1235 to 1.1025 before rebounding to close at 1.1165 (+0.41%). Upward pressure has subsided and GBP is likely to trade sideways for today, likely between 1.1030 and 1.1230.”

Next 1-3 weeks: “We continue to hold the same view as from last Friday (30 Sep, spot at 1.1150) where the recent weakness in GBP has bottomed for now. While the strong rebound has scope to extend, the resistance at 1.1300 is unlikely to come under pressure. Overall, only a breach of 1.0800 (‘strong support’ level) would indicate that the rapid build-up in short-term momentum has eased.”