In the opinion of Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group, GBP/USD risks a deeper pullback once 1.1950 is cleared.
24-hour view: “We did not anticipate the sharp rise in GBP to 1.1940 yesterday (we were expecting GBP to trade sideways). The advance lacks momentum and GBP is unlikely to strengthen much further. Today, GBP is likely to trade between 1.1875 and 1.1950.’
Next 1-3 weeks: “On Wednesday (08 Mar, spot at 1.1830), we indicated that GBP could weaken but likely at a slower pace. We added, ‘The downside risk is intact as long as GBP stays below 1.1950 in the next couple of days’. Yesterday, GBP rose to a high of 1.1940. Downward momentum is beginning to fade and a break of 1.1950 would indicate that GBP is unlikely to weaken further.”