GBP/USD: Further weakness looks likely below 1.2100 – UOB

GBP/USD risks a potential test of the 1.1900 region in the near term, according to Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia at UOB Group.

Key Quotes

24-hour view: “Our expectations for ‘the strong rebound in GBP to extend’ did not materialize as it traded in a quiet manner between 1.2015 and 1.2057 before closing largely unchanged at 1.2040. The price actions appear to be consolidative and GBP is likely to trade in a range today, expected to be between 1.1990 and 1.2060.”

Next 1-3 weeks: “There is not much to add to our update from yesterday (20 Feb, spot at 1.2035). As highlighted, as long as the ‘strong resistance’ at 1.2100 (no change in level from yesterday) is not breached within the next few days, there is still a slim chance for GBP to break below 1.1900. A breach of 1.2100 would indicate that the weakness in GBP that started late last week has come to an end.”