A close above 1.2300 should allow GBP/USD to extend the uptrend in the next few weeks, according to FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.

Key Quotes

24-hour view: “We did not expect the outsized advance in GBP as it surged to 1.2277 before easing off to close at 1.2217 (+1.18%). The sharp and swift rise appears to be running ahead of itself and GBP is unlikely to advance further. For today, GBP is more likely to trade between 1.2160 and 1.2260.”

Next 1-3 weeks: “On Monday (08 Aug, spot at 1.2065), we highlighted that the risk for GBP is tilted to the downside but it has to crack the major support at 1.2000 before a sustained decline is likely. However, GBP did not break 1.2000 as it surged to a high of 1.2277 during NY session. The rapid build-up in upward momentum suggests that the risk for GBP has shifted to the upside. That said, it has to crack the major resistance at 1.2300 before further sustained advance is likely. The upside risk is intact as long as GBP does not move below the ‘strong support’ level at 1.2125 within these couple of days.”