According to Lee Sue Ann, Economist at UOB Group, and Quek Ser Leang, Market Strategist, GBP/USD is likely to rise further when it breaks and sustains above the 1.2505 level.
24-hour outlook: Last Friday we noted that “price movements still appear to be consolidating”, and we expected GBP/USD to trade in a range between 1.2375 and 1.2460. Our view was not wrong, as GBP/USD fell to 1.2375, bounced to a high of 1.2465 and then closed at 1.2462 (+0.38%). The bullish momentum has improved, although only slightly. There is room for GBP/USD to continue rising today, but any advance is likely to encounter solid resistance near last week’s high near 1.2505. To maintain momentum, GBP/USD must hold above 1.2420 (minor support is at 1.2440).
Next 1-3 weeks: After GBP/USD hit a high of 1.2506 last Tuesday, we noted that “GBP/USD is likely to continue advancing but needs to break clearly above 1.2580 before a further sustained rise is likely.” GBP/USD pulled back sharply from the high, and last Friday (November 17, GBP/USD at 1.2415), we highlighted that “although the bullish momentum has eased somewhat, only a break of 1.2350 would indicate that GBP/USD does not keep moving forward.” During the American session on Friday, GBP/USD rebounded and closed at 1.2462 (+0.38%). Despite the bounce, there has been no significant increase in momentum. From here, GBP/USD needs to break and hold above 1.2505 before a move towards 1.2580 can be expected. The probability of GBP/USD breaking clearly above 1.2505 will remain intact as long as it remains above 1.2385 (“strong support” level previously at 1.2350).
Source: Fx Street
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