GBP/USD plunged sharply to 1.1412 low looking into the daily chart but crucially rebounded at that point. Cable now faces a cluster of key levels that may cap gains, in the opinion of economists at Rabobank.
Key quotes
“GBP/USD crucially produced a very strong rebound that must be sustained above 1.20 pivot to expect further recovery in the very near-term.”
“The trendline which until very recently provided GBP/USD with support turned into resistance at 1.2665. Even if cleared, sterling may require a very strong bullish catalyst to extend its gains beyond 1.2780/70.”
“A fall below 1.20 would bring the recently formed bottom around 1.15 under pressure. This must hold to reduce the risk of GBP/USD falling further towards the all-time low at 1.0520.”
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