Further advance in GBP/USD appears on the cards, although Markets Strategist Quek Ser Leang and Economist Lee Sue Ann at UOB Group note a probable test of 1.1760 seems to have lost momentum.

Key Quotes

24-hour view: “We highlighted last Friday that ‘the price movement is likely part of a consolidation’ and we expected GBP to ‘trade within a range of 1.1485/1.1625’. Our view of consolidation was not wrong even though GBP traded within a narrower range than expected (1.1504/1.1622). The underlying tone has firmed somewhat and the bias for today is on the upside. However, a sustained rise above 1.1645 is unlikely (next resistance is at 1.1700). On the downside, a breach of 1.1525 (minor support is at 1.1560) would indicate that the current mild upward pressure has eased.”

Next 1-3 weeks: “We turned positive on GBP early last week. In our latest narrative from last Thursday (27 Oct, spot at 1.1630), we indicated that GBP is still strong and we noted that the next level to monitor is at 1.1760. Since then, GBP has not been able to make much headway on the upside. However, we continue to hold a positive GBP view for now and only a break of 1.1440 (no change in ‘strong support’ level from last Friday) would indicate that GBP is not advancing further. That said, as upward momentum has waned, the odds of GBP advancing to the major resistance at 1.1760 have diminished.”