In the opinion of Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia at UOB Group, GBP/USD now shifts the focus to the 1.2400 region.

Key Quotes

24-hour view: “Last Friday, we highlighted that ‘there is room for another leg higher in GBP to 1.2350 before the risk of a pullback increases’. However, GBP plunged to 1.2137 in NY trade. The decline was however, short-lived as GBP rebounded strongly from the low and closed slightly higher at 1.2293 (+0.24%). We still see room for GBP to edge higher but a break of 1.2350 appears unlikely today. Support is at 1.2245, followed by 1.2200.”

Next 1-3 weeks: “There is no change in our view from last Friday (02 Dec, spot at 1.2260) where GBP is likely to continue to advance and the next level to monitor is at 1.2400. However, after the sharp but brief drop to 1.2137 in NY trade, upward momentum has eased somewhat. To look at it another way, while we continue to expect GBP to advance, it may take a while before 1.2400 comes into the picture.”