A convincing move above the 1.2330 level in GBP/USD looks unlikely for the time being, suggest Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group.

Key Quotes

24-hour view: “We expected GBP to edge higher yesterday but we held the view that ‘it is unlikely to break 1.2270’. However, GBP rose to 1.2288 before pulling back sharply to close at 1.2196 (-0.31%). There is hardly any improvement in upward momentum and GBP is unlikely to advance further. Today, GBP is more likely to trade in a range between 1.2160 and 1.2260.”

Next 1-3 weeks: “We have held a positive GBP view for more than a week now. In our most recent narrative from last Friday (13 Jan, spot at 1.2215), we indicated that GBP ‘must break 1.2270 these 1-2 days or the prospect of further GBP strength would diminish quickly’. While GBP broke above 1.2270 yesterday, it fell quickly from a high of 1.2288. Upward momentum has barely improved and while there is room for GBP to advance further, the likelihood of a sustained rise above 1.2330 is not high for now.”