In the opinion of FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang, GBP/USD seems to have now moved into a 1.2040-1.2255 range fore the time being.

Key Quotes

24-hour view: “We highlighted yesterday that ‘the rapid rise appears to be running ahead but there is scope for GBP to move above 1.2300 first before the risk of a pullback would increase’. We did not expect the sharp and rapid drop to 1.2158 (high has been 1.2279). Downward momentum is building and GBP could weaken to 1.2100. For today, the next support at 1.2040 is not expected to come under threat. Resistance is at 1.2195 followed by 1.2225.”

Next 1-3 weeks: “GBP dropped sharply to a low of 1.2158 yesterday. While our ‘strong support’ at 1.2135 is still intact, upward momentum has fizzled out. In other words, the GBP strength that started late last week has come to an abrupt end. GBP appears to have moved into a consolidation phase and is likely to trade within a range of 1.2040/1.2255 for now.”