GBP/USD: 1.2200 remains on the radar – UOB

In opinion of FX Strategists at UOB Group, a test of the 1.2200 handle stays on the cards in the next 1-3 weeks.

Key Quotes

“While GBP extended its decline as expected, the low of 1.2243 did not reach the target indicated at 1.2225/30. The strong downward pressure that started earlier this week is showing signs of waning and the downside risk appears to be limited from here. That said, it is too early to expect a sustained rebound and GBP is more likely to consolidate its loss and trade sideways at these lower levels”.

“We just turned bearish GBP yesterday and there is no change to the view. The immediate target is still at 1.2200 while the stop-loss is adjusted slightly lower to 1.2385 from 1.2410. As noted yesterday, 1.2200 is a key support and a break of this level could lead to a rapid drop towards the 1.1983 low seen in January”.