GBP/USD to test the 55-day average and uptrend key support at 1.2434/18 – Credit Suisse

GBP/USD strength has been capped at the 1.2693 200-day average and analysts at Credit Suisse look for a test of key support from its 55-day average and uptrend at 1.2434/18.

Key quotes

“GBP/USD strength has been capped at the 200-day average, currently at 1.2693 and the sharp rejection from here reasserts a downward bias again within the broader sideways range.” 

“Support is seen at 1.2505 initially, beneath which should clear the way for a fall back to 1.2455, then what we see as more important support at 1.2434 and 1.2418 – the confirmed uptrend from March and rising 55-day average respectively. We look for an attempt to establish a floor here. A break would raise the prospect of a more concerning break to the downside, with support then seen next at 1.2278 – the 38.2% retracement of the entire rally from March.” 

“Resistance moves 1.2611 initially, above which can see a fresh look at the 200-day average and yesterday’s high at 1.2681/93. Beyond here can clear the way for a fresh look at the high of last week and 78.6% retracement of the decline from December at 1.2813/17, but with fresh sellers expected here.”