Risks appear tilted towards a drop back to the low 1.2400s – Scotiabank

GBP/USD tracks marginally higher but loss of 1.2600s support point lower for Cable, economists at Scotiabank say.

Former support at 1.2600/1.2605 is now key resistance

Loss of support at 1.2600 – the base of the trading range for the GBP since mid-December – is a clear technical negative for the Pound.

Tuesday trading has tracked slightly higher but that only gives the impression of consolidation ahead of renewed weakness (bear flag pattern) on the intraday chart.

GBP retracement support at 1.2535 may help anchor the GBP in the short run but risks appear tilted towards a drop back to the low 1.2400s. 

Former support at 1.2600/1.2605 is now key resistance.