The continuation of the upside in GBP/USD is expected to meet a tough barrier at the 1.1600 region, suggest Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group’s Global Economics & Markets Research.

Key Quotes

24-hour view: “We highlighted yesterday that GBP ‘could rise further to 1.1530 before a pullback is likely’. GBP subsequently rose to 1.1493, plummeted to 1.1230 before rebounding to close at 1.1319 (1.37%). The choppy price actions are likely part of a broad consolidation phase and we expect GBP to trade within a range of 1.1240/1.1440.”

Next 1-3 weeks: “Our update from yesterday (05 Oct, spot at 1.1450) still stands. As highlighted, there is room for GBP to advance further but it remains to be seen if it can break the next resistance at 1.1600. Overall, only a breach of 1.1230 (no change in ‘strong support’ level from yesterday) would indicate that the strong upward momentum that started last Friday has eased. Note that GBP dropped to 1.1230 in NY trade before rebounding strongly.”