In the opinion of FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang, GBP/USD is now seen navigating the 1.2040-1.2255 range in the next few weeks.
Key Quotes
24-hour view: “We expected GBP to weaken yesterday but we were of the view that ‘the major support at 1.2040 is not expected to come into the picture’. The subsequent price actions did not turn out as we expected as GBP surged briefly to 1.2220, plunged to 1.2065 before snapping back up to end the day little changed at 1.2158 (+0.08%). The sharp swings have resulted in a mixed outlook. For today, GBP could continue to trade in a choppy manner, likely staying within yesterday’s broad range of 1.2065/1.2220.”
Next 1-3 weeks: “Our latest narrative was from Wednesday (03 Aug, spot at 1.2160) where GBP is in a consolidation phase and is likely to trade within a range of 1.2040/1.2255. Yesterday, GBP rose briefly to 1.2220, plunged to 1.2065 before rebounding to close little changed at 1.2158 (+0.08%). The price actions offer no fresh clues and we continue to hold the same view for now.”