In the opinion of Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group, further downward bias in GBP/USD seems to be running out of steam.

Key Quotes

24-hour view: “Yesterday, we expected GBP to trade sideways in a range of 1.2420/1.2500. GBP then traded between 1.2414 and 1.2471 before closing largely unchanged at 1.2437 (-0.07%). Further sideways trading would not be surprising, likely between 1.2400 and 1.2480.”

Next 1-3 weeks: “We continue to hold the same view as yesterday (22 May, spot at 1.2460). As highlighted, downward momentum has slowed but only a clear break above 1.2500 (no change in ‘strong resistance’ level) would indicate that the GBP weakness that started more than a week ago (see annotations in the chart below) has come to an end. Looking ahead, if GBP breaks below 1.2390 in the next couple of days, the next level to watch is 1.2350.”