GBP/USD is now expected to navigate between 1.1970 and 1.2160 in the next few weeks, note UOB Group’s Economist Lee Sue Ann and Market Strategist Quek Ser Leang.

Key Quotes

24-hour view: “While we expected GBP to strengthen yesterday, we were of the view that it ‘is unlikely to challenge the major resistance at 1.2150’. Our view was not wrong as GBP soared to a high of 1.2143 before staging a relatively sharp pullback to close at 1.2018 (-0.37%). While the pullback has scope to extend, any decline is viewed as part of a lower trading range of 1.1970/1.2090. In other words, a sustained drop below 1.1970 is unlikely.”

Next 1-3 weeks: “We highlighted yesterday (28 Feb, spot at 1.2065) that GBP is likely to trade in a broad consolidation range between 1.1970 and 1.2150 for the time being. GBP soared to a high of 1.2143 in NY trade before staging a sharp and swift pullback. The price actions still appear to be part of a consolidation and we continue to hold the same view.”