FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang noted the upside in GBP/USD carries the potential to advance to the 1.2335 levels ahead of 1.2400 in the next few weeks.

KEY QUOTES

24-hour view: “The strong rise in GBP to a high of 1.2292 yesterday came as a surprise (we were expecting GBP to trade within a range of 1.2110/1.2230). The rapid rise appears to be running ahead but there is scope for GBP to move above 1.2300 first before the risk of a pullback would increase. For today, the major resistance at 1.2335 is unlikely to come into the picture. Support is at 1.2225 followed by 1.2190.”

Next 1-3 weeks: “Last Thursday (28 Jul, spot at 1.2165), we held the view that GBP is likely to trade with an upward bias towards 1.2240. After GBP rose to a high of 1.2245 and retreated, we highlighted yesterday (01 Aug, spot at 1.2170) that the bias for GBP is still on the upside but we were of the view that the major resistance at 1.2245 may not be easy to break. We did not expect the subsequent strong rise as GBP cracked 1.2245 and soared to a high of 1.2292. The boost in momentum is likely to lead to further GBP strength towards 1.2335, possibly as high as 1.2400. Support is at 1.2190 but only a break of 1.2135 would indicate that the current upward pressure has eased.”