Further range bound trade is still expected in GBP/USD, likely within 1.1950 and 1.2190, suggest Markets Strategist at UOB Group Quek Ser Leang and Senior FX Strategist Peter Chia.

Key Quotes

24-hour view: “We did not expect the sharp drop in GBP to 1.2012 yesterday (we were expecting GBP to trade sideways). Despite the decline, there is no significant increase in downward momentum. Today, GBP could drop further but any decline is likely part of a lower trading range of 1.2000/1.2150. In other words, a clear break of 1.2000 is unlikely.”

Next 1-3 weeks: “On Tuesday (14 Mar, spot at 1.2185), we highlighted that upward momentum is beginning to build but GBP has to break clearly above 1.2240 before a sustained advance is likely. We added, ‘the chance of a clear break above 1.2240 will remain intact as long as GBP stays above 1.2040’. GBP did not break 1.2240 but instead, dropped to a low of 1.2012 yesterday. Despite the relatively sharp drop, downward momentum has not improved much. For the time being, GBP is likely to trade in a broad range, expected to be between 1.1950 and 1.2190.”