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.
“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.”