GBP/USD to look for a deeper corrective setback to 1.3430 – Credit Suisse

The GBP/USD pair is expected to see further weakness below the “neckline” to the 2018 top at 1.3710/20, with support seen at 1.3487/61, then 1.3430, analysts at Credit Suisse inform.

Key quotes

“GBP/USD remains under pressure as expected after its bearish ‘reversal day’ from the ‘neckline’ to the 2018 top at 1.3710/20 and a lengthier correction to the strength of the past four months is still looked for, further reinforced by a bearish RSI divergence and the USD recovering from key support.” 

“The clear break of support at 1.3533 is seen adding weight to a setback story with support seen next at 1.3487 – the 38.2% retracement of the rally from December. With the 26.3% retracement of the entire rally from November at 1.3461, we look for a fresh floor looked for in this 1.3487/61 zone at first. Below in due course though can see support next at the late December low at 1.3430, with better support expected at the 55-day average at 1.3354.” 

“Resistance is seen at 1.3529/39 initially, with 1.3577 now ideally capping to keep the immediate risk lower. Above can see a move back to 1.3636/71, but with this needing to be cleared to suggest the setback is over for a retest of 1.3710/20.”