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Karen Jones, analyst at Commerzbank, suggests that GBP/USD pair is approaching its 3 month down channel at 1.2303, and look for this to hold the initial test.

Key Quotes

“Only a close above the downtrend this would introduce scope to the 55 day ma at 1.2416 and the June high at 1.2784. Dips lower will find minor support at 1.2108 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).”