Pound Sterling (GBP) is expected to continue to advance; the significant resistance at 1.2410 is probably out of reach today. In the longer run, GBP view is positive, anticipating a move to 1.2410, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

GBP view is positive

24-HOUR VIEW: “Our view for GBP to ‘trade with a downward bias’ yesterday was incorrect. GBP surged, blowing past several resistance levels with ease (high has been 1.2344). Although we expect GBP to continue to advance today, the significant resistance at 1.2410 is probably out of reach today. Note that there is another resistance level at 1.2380. On the downside, any pullback is likely to remain above 1.2240.”

1-3 WEEKS VIEW: “Yesterday (20 Jan, spot at 1.2170), we highlighted, “there has been a tentative buildup in momentum, but GBP must break clearly below 1.2100/1.2130 support zone before further weakness can be expected.” The tentative buildup in momentum fizzled out quickly, as GBP surged above our ‘strong resistance’ level at 1.2305. From here, we are revising our view for GBP to positive, anticipating a move to 1.2410. We will maintain our view as long as the ‘strong support’ level, currently at 1.2210, is not breached. The ‘strong support’ level is set to move higher in the coming days.”