In the view of UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang, GBP/USD could extend the upside on a more convincing fashion once 1.2440 is cleared.

Key Quotes

24-hour view: “We highlighted yesterday that ‘the rapid rise has scope to test 1.2145’. We added. ‘The major resistance at 1.2240 is not expected to come into view’. GBP strengthened more than expected as it rose to 1.2200 before closing on a strong note at 1.2183 (1.22%). Further GBP strength appears likely even though it remains to be seen if GBP can clearly break above 1.2240. Support is at 1.2135; a breach of 1.2090 would indicate that the current upward pressure has faded.”

Next 1-3 weeks: “Yesterday (14 Mar, spot at 1.2085), we held the view that the outlook for GBP is mixed and we expected it to trade in a broad range of 1.1950/1.2240 for the time being. GBP rose to a high of 1.2200 in NY trade and upward momentum is beginning to build. That said, GBP has to break clearly above 1.2440 before a sustained advance is likely. In the next few days, the chance of a clear break above 1.2440 will continue to increase as long as GBP stays above 1.2040.”