The prospects for GBP/USD to revisit the 1.2400 region now appear somewhat curtailed, according to Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group.

Key Quotes

24-hour view: “Our expectations for GBP to ‘strengthen further’ were incorrect as it tumbled to a low of 1.2180 before rebounding. The price actions are likely part of a consolidation phase. Today, we expect GBP to trade sideways between 1.2180 and 1.2275.”

Next 1-3 weeks: “After GBP soared, we highlighted yesterday (21 Mar, spot at 1.2270) that it is likely to strengthen further to 1.2400. We did not anticipate the sharp pullback that came close to taking out our ‘strong support’ level at 1.2180 (low has been 1.2180). We will hold on to our positive GBP view for now but with a ‘strong support’ level at 1.2140. Overall, the chance of GBP rising to 1.2400 has diminished. Note that there is another solid resistance level at 1.2330.”