GBP/USD still faces some consolidation near term – UOB

GBP/USD is now seen within the 1.1680-1.1940 range in the next few weeks, suggest Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group.

Key Quotes

24-hour view: “Our view for GBP to consolidate between 1.1820 and 1.1940 yesterday was incorrect as it slumped to a low of 1.1780. Despite the decline, downward momentum has not improved much. However, as long as 1.1880 is not breached (minor resistance is at 1.1855), GBP could retest the 1.1780 level before a more substantial rebound is likely. The next support at 1.1740 is unlikely to come into view.”

Next 1-3 weeks: “After GBP soared to a high of 1.2027, we highlighted last Wednesday (16 Nov, spot at 1.1880) that GBP could consolidate first before making another push higher and we were of the view that the chance of a break of 1.2100 does not appear to be high. Yesterday (21 Nov), GBP dropped below our ‘strong support’ level at 1.1790 (low of 1.1780). Upward pressure has dissipated and GBP appears to have moved into a consolidation phase and is likely to trade between 1.1680 and 1.1940 for the time being.”