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Karen Jones, analyst at Commerzbank, suggests that GBP/USD pair has eroded its 3 month down channel at 1.2272.

Key Quotes

“It is only just above the downtrend, nonetheless it has closed above here and for now we will go with it. This opens the way for recovery to the 55 day ma at 1.2393 and the June high at 1.2784. Dips lower will find minor support at 1.2181, the 20th August high, ahead of the 1.2015 recent low and TD support at 1.1988. Below 1.1988 lies the 1.1491 3rd October low (according to CQG).”

“Only a rise above the June high at 1.2784 would indicate that a bottom is being formed (not favoured).”