Further upside in GBP/USD remains on the cards with a strong resistance at 1.2245, noted FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.

Key Quotes

24-hour view: “We highlighted last Friday that GBP ‘could edge above 1.2200’. We added, ‘the major resistance at 1.2240 is still unlikely to come into the picture’. However, GBP subsequently popped to 1.2245 and plunged sharply 1.2065 before snapping back up to end the day unchanged at 1.2184. The sharp but short-lived swings have resulted in a mixed outlook and further choppy price actions are not ruled out. Expected range for today, 1.2110/1.2230.”

Next 1-3 weeks: “In our latest narrative from last Thursday (28 Jul, spot at 1.2165), we held the view that GBP is likely to trade with an upward bias towards 1.2240. GBP rose to a high of 1.2245 on Friday, dropped sharply to a low of 1.2065 before rebounding to close unchanged at 1.2184. While upward momentum has waned, as long as 1.2065 (no change in our ‘strong support’ level from last Friday) is not clearly breached, the bias for GBP is still on the upside. That said, 1.2245 is a solid resistance level and may not be easy to break. Looking ahead, the next resistance level above 1.2245 is at 1.2300.”