Scope for a deeper setback to the 55-DMA at 1.2676, but with support expected here – Credit Suisse

GBP/USD fell sharply on Thursday. Economists at Credit Suisse analyze the pair’s technical outlook.

Resistance is seen at 1.2878/83 initially, then more importantly at 1.2997

There is scope for a deeper setback to be seen for a 55-DMA and price support at 1.2676/58, but with fresh buyers expected here, for an eventual resumption of its broader uptrend. Should a close below 1.2658 be seen though this would keep the immediate risk lower with support then seen next at 1.2631/27, then 1.2483/73.

Resistance is seen at 1.2878/83 initially, a close back above which is needed to raise the potential we have seen a ‘false’ break of the uptrend. Above the ‘outside day’ high of yesterday though at 1.2997 is needed to mark a reversal higher to reassert the core uptrend for a move back to the 1.3143 high.