GBP/USD extended its run higher. Although the pound remains in a weak position, economists at OCBC Bank caution that U-turns in policies can also surprise on the upside.

GBP to trade in choppy fashion

“Bullish momentum on daily chart intact while rise in RSI shows tentative signs of moderation.”

“Immediate resistance at 1.1490 (50 DMA). Support at 1.1225, 1.1150 (21 DMA).”

“Renewed political uncertainties, U-turns in policies would continue to see GBP trade in choppy fashion.”

“Still-weak macro fundamentals (stagflation concerns), lingering political uncertainties, deterioration in twin deficits on current account and fiscal accounts may continue to support sell GBP on rallies though we continue to caution that U-turns in policies can also surprise on the upside.”