GBPUSD: Potential consolidation ahead of further upside – UOB

Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group suggest GBPUSD could face some consolidative mood ahead of the probable continuation of the uptrend.

Key Quotes

24-hour view: “Yesterday, we held the view that GBP ‘is likely to edge higher but any advance is likely limited to a test of 1.1970’. GBP subsequently rose to 1.1958, dropped sharply to 1.1765 before rebounding to end the day at 1.1860 (-0.38%). The price movements appear to be part of a broad consolidation and we expect GBP to trade between 1.1790 and 1.1950 today.”

Next 1-3 weeks: “After GBP soared to a high of 1.2027, we highlighted two days ago (16 Nov, spot at 1.1880) that GBP could consolidate first before making another push higher but the chance of a break of 1.2100 does not appear to be high. While there is no change in our view, upward momentum is beginning to wane. However, only a break of 1.1750 (no change in ‘strong support’ level) would indicate that GBP is not advancing further.”