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GBP/USD still holds a cluster of supports a 1.2721/1.2655, but with a break above 1.2777/81 needed to ease the pressure off this support, according to the Credit Suisse analyst team.

Key quotes

“GBP/USD continues to stabilise at our target of a cluster of supports at 1.2722/1.2655 – the 200-day average, the 38.2% retracement of the entire March/September rally, 23.6% retracement of the entire rally from the March low and ‘measured top objective’.”

“Above 1.2777/81 is needed to ease the immediate pressure of this support for a recovery back to 1.2835, then more important resistance from the 13-day average and 23.6% retracement of the September decline at 1.2864/71. Only a close above here though would suggest we have seen a near-term base for strength back to challenge what we see as more important resistance, starting at 1.2967 ad stretching up to 1.3007.”

“A break below 1.2655 would warn of a more significant move lower with support seen next at 1.2512, then 1.2447 – the 50% retracement of the rally from March. Whilst we would look for this latter level to hold at first, we would look for a break in due course with what we would expect to be better support seen at 1.2252/03, the 61.8% retracement and June low.”