In the opinion of Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group, further upside in GBP/USD needs to clear the 1.2155 region in the near term.

Key Quotes

24-hour view: “GBP plunged to a low of 1.1900 yesterday before rocketing to a high of 1.2086. While overbought, the rally has scope to extend above 1.2120. In view of the overbought conditions, GBP might not be able to hold above this level. The next resistance at 1.2155 is unlikely to come into view. Support is at 1.2040, followed by 1.2010.”

Next 1-3 weeks: “On Monday (29 Nov, spot at 1.1965), we indicated that GBP is likely to consolidate within a range of 1.1850/1.2080. Yesterday, GBP soared in NY trade and moved a few pips above 1.2080 (high of 1.2086). Further GBP strength appears likely but in order to keep the momentum going, GBP has to continue to move higher and break above the major resistance at 1.2155 within the next 1 to 2 days. The next major resistance is some distance away at 1.2300. On the downside, a breach of the ‘strong support’ at 1.1960 would indicate that GBP is not ready to head higher.”