In light of the recent price action, GBP/USD could now attempt a move to 1.1440 in the near term, according to Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia at UOB Group.

Key Quotes

24-hour view: “Yesterday, we held the view that the ‘rapid rise in GBP could test 1.1175 first before the risk of a pullback increases’. However, GBP blew past 1.1175 as it surged to a high of 1.1380 before easing off to close sharply higher at 1.1332 (+2.10%). The sharp rally appears to be overdone and GBP is unlikely to advance much further. For today, GBP is more likely to trade within a relatively broad range of 1.1220/1.1390.”

Next 1-3 weeks: “We highlighted yesterday that further decline in GBP is not ruled out but the support at 1.0840 is unlikely to be broken. We did not expect the sharp rally that sent GBP to a high of 1.1380. While overbought, the rapid rally has gained momentum and GBP could rise to 1.1440. Overall, only a break of 1.1120 (‘strong support’ level) would indicate that the rally in GBP is not extending further.”