UOB adopts a tactical bearish bias on GBP/USD towards 1.12270.
"As highlighted, GBP “could decline towards 1.2320, possibly as low as 1.2270”. The pace of the subsequent decline was faster than anticipated as GBP dropped to a low of 1.2344 during NY hours last Friday. Downward momentum remains strong and 1.2320 could be within reach soon. A clear break of this level would shift the focus to 1.2270,"UOB notes.
"At this stage, it is left to be seen if GBP can maintain a toe-hold below 1.2270. Overall, GBP is expected to stay under pressure unless it can move above 1.2480 (‘strong resistance’ level was at 1.2550 last Friday)," UOB adds.