In the view of UOB Group’s Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia, GBP/USD could advance further in the near term.

Key Quotes

24-hour view: We expected GBP to continue to rally last Friday but we were of the view that it “is highly unlikely to threaten the resistance at 1.2680”. We stated, “there is another resistance at 1.2600”. GBP rose less than expected to 1.2590 before trading sideways. Today, we see room for GBP to edge higher but it is still highly unlikely to threaten the resistance level at 1.2680. Minor resistance is at 1.2615. On the downside, a breach of 1.2505 (minor support is at 1.2540) would indicate that the current upward pressure has eased.

Next 1-3 weeks: There is not much to add to our update from last Friday (09 Jun, spot at 1.2555). As highlighted, while GBP is likely to rise further, it remains to be seen if it has enough momentum to revisit last month’s high near 1.2680. On the downside, a breach of 1.2450 (no change in ‘strong support’ level) would indicate that 1.2680 is not coming into view