A potential move to the 1.2400 region in GBP/USD seems to have lost some traction as of late, note Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group.

Key Quotes

24-hour view: “GBP eked out a fresh 3-week high of 1.2341 yesterday before easing off to close at 1.2285 (+0.13%). Upward pressure has eased and GBP is unlikely to strengthen further. Today, GBP is more likely to trade in a range, expected to be between 1.2230 and 1.2330.”

Next 1-3 weeks: “We have expected GBP to advance since the start of the week. In our most recent update from two days (22 Mar, spot at 1.2220), we stated that ‘the chance of rising to 1.2400 has diminished’. Yesterday, GBP rose to 1.2341 and then pulled back to close at 1.2285 (+0.13%). While GBP strength is still intact, short-term upward momentum is beginning to wane, and this combined with overbought conditions suggests 1.2400 may be out of reach this time around. However, only a breach of 1.2190 (‘strong support’ level previously at 1.2140) would indicate that GBP is not strengthening further.”