GBP/USD: Upside pressure alleviated below 1.2000 – UOB
Cable’s upside momentum could lose traction on a breakdown of the 1.2000 mark, noted FX Strategists at UOB Group.
24-hour view: “We held the view yesterday that GBP ‘could drift lower to 1.2300, possibly testing the support at 1.2240’. However, GBP plunged to 1.2241, snapped back up almost immediately and subsequently rose to an overnight high of 1.2471. From here, GBP could edge above Monday’s (30 Mar) high of 1.2484 but a move beyond 1.2550 would come as a surprise. Support is at 1.2350 followed by 1.2310. The 1.2241 low is unlikely to come into the picture for today.”
Next 1-3 week: “There is not much to add to the update from last Friday (27 Mar, spot at 1.2200). As highlighted, the current recovery in GBP has scope to extend higher but the prospect for a move beyond 1.2550 is not high. On the downside, only a break of 1.2000 (‘strong support’ level previously at 1.1880) would indicate that the current upward pressure has eased.”