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Axel Rudolph, analyst at Commerzbank, explains that last week GBP/USD dropped to 1.2481, practically to the December and January lows at 1.2477/44 which offered support and is the last defence for 1.2108, the 78.6% retracement of the move up from 2016.

Key Quotes

“For now this support zone underpins. Minor resistance comes in at the 1.2559 May low. Immediate downside pressure will be maintained while the cross remains below last Friday’s high at 1.2589.”

“A rise above the June high at 1.2784 would indicate that a bottom is being formed.”