The continuation of the upward trend of the GBP/USD surpass the 1.2745 level in the short term, according to economist Lee Sue Ann and market strategist Quek Ser Leang of UOB Group.
24 hour perspective: We expected the Pound to trade in a range of 1.2655/1.2720 last Friday. However, after falling to a low of 1.2612, it shot up and ended the day on a strong note at 1.2709 (+0.65%). The strong and rapid rise appears to be running out, and the GBP is unlikely to continue strengthening much further. Today, the Pound is more likely to trade sideways at these higher levels, probably between 1.2650 and 1.2725.
Next 1-3 weeks: Last Thursday (Nov 30, pair at 1.2695), we indicated that there was room for it to advance to 1.2745 before the risk of a pullback increased. After the Pound retreated sharply to 1.2604, on Friday (Dec 1, pair at 1.2635) we indicated that unless GBP breaks above 1.2690 in the next two days, a break of ‘strong support’ would not be surprising of 1.2600 and would mean the beginning of a deeper decline. We did not expect the Pound to rebound strongly to 1.2716. The bullish momentum received a boost, although not much. From now on, Pound has to break and hold at 1.2745 before a further advance to 1.2795 is likely. To maintain momentum, GBP must not break 1.2620 (‘strong support’ level previously at 1.2600).
Source: Fx Street
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