GBP/USD: Scope for a deeper corrective setback to test the 55-DMA 1.3753 – Credit Suisse

GBP/USD maintains a “head & shoulders” top and analysts at Credit Suisse stay biased lower for a deeper corrective setback to the 55-day moving average (DMA) at 1.3753.  

Key quotes

“Cable’s strength has been capped at the 13-day exponential average at 1.3905 and with a small ‘head & shoulders’ top in place we continue to look for a more concerted phase of corrective weakness. Below 1.3800 is needed to add weight to this view for a fall back to 1.3779/76, then the 55-day average at 1.3753, which we look to hold at first.”  

“Our bias is now for a break below the 55-day average at 1.3753 for a test of 1.3741/31 next and then the medium-term uptrend from March 2020, today seen at 1.3680. Below here can see support next at the 38.2% retracement of the September/January rise at 1.3641, with the ‘measured top objective’ seen at 1.3478.”

“Resistance moves to 1.3925 initially, with 1.3954 now ideally capping to keep the immediate risk lower. Above would raise the prospect we are set for a high-level consolidation range, with resistance seen next at 1.4017.”