GBP/USD needs to clear the 1.2300 level to allow for sustained gains in the short-term horizon, suggest FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.

Key Quotes

24-hour view: “We highlighted yesterday that GBP ‘is unlikely to advance further’ and we expected GBP to ‘trade between 1.2160 and 1.2260’. GBP subsequently traded within a narrower range than expected (1.2185/1.2250) before closing largely unchanged at 1.2215 (-0.02%). The current movement appears to be part of a consolidation phase and GBP is likely to trade sideways for today. That said, the slightly softened underlying tone suggests a lower range of 1.2160/1.2240.”

Next 1-3 weeks: “Yesterday (11 Aug, spot at 1.2215), we highlighted that while the risk for GBP has shifted to the upside, it has to crack major resistance at 1.2300 before further sustained advance is likely. There is no change in our view. The upside risk is intact as long as GBP does not move below 1.2125 (no change in ‘strong support’ level).”