The likeliness for extra gains in GBP/USD remains in place with the next target of note at the 1.2400 region, suggest UOB Group’s Economist Lee Sue Ann and Market Strategist Quek Ser Leang.

24-hour view: “We highlighted yesterday that ‘Despite the advance, there is no significant improvement in upward momentum’. We added, ‘However, there is room for GBP to rise to 1.2370 before the risk of a pullback increases’. GBP rose to a high of 1.2362 in London trade before pulling back to end the day at 1.2314 (-0.22%). The underlying tone has softened somewhat but while GBP is likely to edge lower, any decline is viewed as part of a 1.2270/1.2340 range. In other words, a clear break below 1.2270 is unlikely.”

Next 1-3 weeks: “Our update from yesterday (29 Mar, spot at 1.2330) is still valid. As highlighted, upward momentum appears to be building, albeit tentatively. In order for GBP to advance in a sustained manner, it has to break and stay above 1.2400. The likelihood of a clear break of 1.2400 is not high for now but it will remain intact as long as GBP stays above 1.2240 in the next 1-2 days. Looking ahead, the next resistance level above 1.2400 is a solid level at 1.2450.”