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GBP/USD is recovering from the bottom of its 4 month trading range and will find initial resistance at the 55 day ma at 1.2993 and the resistance line at 1.3043, where it is likely to struggle, suggests Karen Jones, Analyst at Commerzbank.

Key Quotes

“Support lies at 1.2710/1.2662, the August low and 3 month support line. Below 1.2662 would trigger further weakness to the 61.8% Fibonacci retracement of the 2016-2018 advance and the June 2017 low at 1.2593/89. Above 1.3043 lies the November 14 high at 1.3072. Further resistance comes in at the 1.3175 current November high below which we will retain a longer term bearish bias.”

Short term trend (1-3 weeks): Range trades between 1.2662 and 1.3260/1.3363 but with a bearish bias.”

Long term trend (1-3 months): Support at 1.2662 guards 1.2589/57, the November 2016, February 2017, and early April 2017 highs as well as the June 2017 low.”