GBP/USD could test the 1.2480 area – UOB

In light of the recent price action, Cable remains poised for a potential test of the 1.2480 area, suggested FX strategists at UOB Group.

Key Quotes

“GBP rocketed to hit a high of 1.2416, just below the 1.2430/35 seen earlier this month. While extremely overbought, the rally is accompanied by impulsive momentum and it is premature to expect a sustained pullback”.

“While we highlighted that we were uncertain whether the recent GBP weakness could be sustained, the spectacular rally yesterday was clearly unexpected. From here, the recovery appears incomplete and further up-move towards the declining trend-line resistance near 1.2480 seems likely. Overall, we expect GBP to remain underpinned in the coming days with solid support near 1.2240”.