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GBP/USD weakness has extended on the latest negative Brexit news and the cable is only holding above the 1.31 level. Below 1.3078/54, the pair would mark a top and a more important turn lower, economists at Credit Suisse apprise.

Key quotes

“GBP/USD weakness has extended for a decisive break of its 13-day average and price support at 1.3268/43 and with RSI momentum now not only holding a bearish divergence but now also a top, and with DeMark exhaustion signals also in place the risk for a top is seen growing sharply.” 

“Pivotal support is seen starting at the ‘neckline’ to the top at 1.3078, with key price support at 1.3054. Below this latter level is needed to see a top confirmed to mark a more important turn lower with support then seen next and initially at 1.3012/05 – the August low. Whilst we would look for this to hold at first, below in due course should see a move to the 55-day average next at 1.2892.”

“Immediate resistance is seen at 1.3198 with a break above 1.3239 needed to ease the immediate downside bias for a move back to 1.3319. Beyond here is needed to reassert the uptrend again with resistance next at 1.3403/09, then the high at 1.3482.”