In the opinion of Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group, GBP/USD should keep the side-line theme well in place for the time being.

Key Quotes

24-hour view: “Our view for GBP to trade in a range last Friday was incorrect as it dropped sharply to 1.2192 before rebounding. The rebound in oversold conditions suggest GBP is unlikely to weaken much further. Today, GBP is more likely to trade sideways, expected to be 1.2200 and 1.2300.”

Next 1-3 weeks: “We have expected GBP to advance since the start of last week. In our most recent update from last Friday (24 Mar, spot at 1.2275), we stated that ‘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’. In London trade, GBP dropped sharply to a low of 1.2192. While our ‘strong support’ level at 1.2190 is not breached, upward momentum has more or less fizzled out. In other words, the week-long GBP strength has ended. The current movement is likely part of a consolidation phase. From here, GBP could trade within a range of 1.2140/1.2340.”