24-hour view: Yesterday, we held the view that “there is room for GBP to rise to 1.2325 before the risk of a pullback increases.” While GBP rose as expected, it not only blew past 1.2325 but also broke above several other resistance levels as it rocketed to a high of 1.2506. The outsized rally is severely overstretched, but GBP could rise to 1.2530 before levelling off. The major resistance at 1.2580 is unlikely to come under threat for now. Support is at 1.2450, followed by 1.2400. 

Next 1-3 weeks: Our latest narrative was from last Thursday (09 Nov, spot at 1.2285), wherein GBP is likely to trade in a range of 1.2180/1.2400. The rangetrading phase is clearly over after GBP jumped and blew past several resistance levels in a row in NY trade. While GBP is likely to continue to advance, it has to break clearly above 1.2580 before a further sustained rise is likely. The chance of GBP breaking clearly above 1.2580 will remain intact as long as it stays above 1.2350 (current level of ‘strong support’).