GBP/USD keeps the erratic activity within 1.2430-1.2670 – UOB

GBP/USD is still seen navigating the 1.2430-1.2670 range in the next weeks, noted FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.

Key Quotes

24-hour view: “We expected GBP to ‘trade sideways within a range of 1.2470/1.2570’ yesterday. However, GBP dropped to 1.2433 before snapping back up to close higher at 1.2590 (+0.49%). The rapid bounce from the low has scope to extend but a sustained rise above 1.2630 is unlikely (next resistance is at 1.2670). On the downside, a break of 1.2540 (minor support is at 1.2570) would indicate that the current upward pressure has eased.”

Next 1-3 weeks: “Last Friday (03 Jun, spot at 1.2570), we highlighted that the sharp but short-lived swings have resulted in a mixed outlook and we expected GBP to trade between 1.2470 and 1.2670. Yesterday (06 Jun, spot at 1.2515), we highlighted that the underlying tone has softened and GBP could dip below the support at 1.2470. We added, ‘looking ahead, GBP has to close below 1.2430 before a sustained decline is likely’. GBP subsequently dropped briefly to 1.2433 before rebounding sharply. With the whippy price actions, the outlook remains mixed and further choppy movement would not be surprising, likely between 1.2430 and 1.2670.”