GBP/USD has likely moved into a consolidative phase according to Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group.

Key Quotes

24-hour view: “We expected GBP to consolidate between 1.2325 and 1.2385 yesterday. However, after dropping to a low of 1.2328, it lifted off and surged to a high of 1.2447 before closing on a firm note at 1.2413 ( 0.44%). The rapid rise appears to be running ahead of itself and while there is room for GBP to strengthen further, any advance is likely part of a higher range of 1.2360/1.2455. In other words, a sustained rise above 1.2555 is unlikely.”

Next 1-3 weeks: “While we have held a negative GBP since the middle of the month, in our latest narrative from last Friday (26 May, spot at 1.2320), we indicated that ‘while GBP weakness is intact, it remains to be seen if 1.2175 will come into view this time round’. We added, ‘a breach of 1.2415 would suggest the GBP weakness has stabilized’. Yesterday (30 May), GBP soared and cracked 1.2415 (high has been 1.2447). The price actions suggest the GBP weakness has stabilized. While upward momentum has improved somewhat, it is premature to expect a reversal. For now, GBP is likely to trade in a range between 1.2330 and 1.2505.”