Further decline in GBP/USD is expected to meet solid contention around 1.2275 for the time being, note Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group.

Key Quotes

24-hour view: “Yesterday, we expected GBP to trade in a range between 1.2385 and 1.2455. We did not anticipate the elevated volatility as GBP traded in a choppy manner between 1.2393 and 1.2475. The price actions have resulted in a mixed outlook and GBP could trade in a range today, likely between 1.2375 and 1.2475.”

Next 1-3 weeks: “Our most recent narrative was from Monday (17 Apr, spot at 1.2405) wherein GBP could edge lower but any decline is unlikely to break clearly below the major support at 1.2275. Yesterday, GBP swung between 1.2393 and 1.2475. As there is no clear breach of our ‘strong resistance’ at 1.2475, we will continue to hold the same view for now.”