Continuation of the bullish bias could lead GBP/USD to revisit the 1.2500 area in the coming weeksas suggested by Quek Ser Leang, Market Strategist at UOB Group, and Peter Chia, Senior Currency Strategist.
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24-hour outlook: The sudden rise that shot GBP/USD to a high of 1.2389 was a surprise (we expected it to trade within a range). Although very overbought, GBP/USD could first rise above 1.2400 before stabilizing. The next resistance at 1.2430 is out of reach for now. Support is at 1.2330, followed by 1.2300.
Next 1-3 weeks: Last Friday we highlighted that we maintained our view that GBP/USD is “likely to trade in a range between 1.2085 and 1.2240”. We also highlight that “looking ahead, the probability of GBP/USD breaking above the top of the expected range first is greater than that of breaking below the bottom of the range.” That said, we did not expect GBP/USD to take off and shoot up 1.46% (NYC close at 1.2380). From a short-term perspective, the outsized recovery appears overblown. However, as long as GBP/USD holds above 1.2245 (“strong support” level), it could rise above 1.2430, possibly reaching the main resistance at 1.2510.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
