Further upside could motivate GBP/USD to challenge the key barrier at 1.2500 in the short term suggest UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang.

Key Quotes

24-hour view: “While GBP closed higher by 0.49% (NY close of 1.2401), upward momentum has not improved much. The bias is still on the upside but a sustained advance above 1.2445 is unlikely. On the downside, a breach of 1.2355 (minor support is at 1.2375) would indicate that the current mild upward pressure has eased.”

Next 1-3 weeks: “Our most recent narrative was from 18 Jan (spot at 1.2280) where we indicated that while upward momentum has not improved much, GBP is likely to edge higher to 1.2390. While GBP subsequently rose, upward momentum is still not strong. However, as long as 1.2300 (‘strong support’ level) is not breached, GBP is likely to edge above 1.2450. That said, it remains to be seen if GBP can break 1.2500. Overall, only a breach of 1.2300 would indicate that the current mild upward pressure has eased.”