Extra gains appear likely in GBP/USD with a potential target at the 1.2240 level in the short term, suggested FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.

Key Quotes

24-hour view: “We highlighted yesterday that ‘the rapid rise has room to extend but in view of the overbought conditions, the major resistance at 1.2240 is unlikely to come into the picture’. We added, ‘there is another resistance at 1.2200’. GBP advanced less than expected as it eased off from a high of 1.2192. While upward momentum has not improved by much, GBP could edge above 1.2200. However, the major resistance at 1.2240 is still unlikely to come into the picture. Support is at 1.2145 followed by 1.2115.”

Next 1-3 weeks: “Our update from yesterday (28 Jul, spot at 1.2165) still stands. As highlighted, GBP is likely to trade with an upward bias towards 1.2240. The upside risk is intact as long as GBP does not move below 1.2065 (no change in ‘strong support’ level from yesterday) within these few days.”