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The Credit Suisse analyst team believes the GBP/USD pair has the potential to see the biggest move during 2021 amongst the G10 bloc and expect the cable to reach the 1.4984/1.5136 area next year. 

Key quotes

“We maintain a core bullish GBP/USD outlook as a clear and sustained weekly close above the critical high of 2019 at 1.3514 would mark a major change of trend higher, clearing the way for further strength in 2021.” 

“Our immediate focus remains on the 38.2% retracement of the 2014/2020 fall at 1.3620 after the market reversed from this level last week. Whilst further consolidation is possible below here, a closing break should open up 1.3710/20 next – the 23.6% retracement of the entire 2007/2020 bear market and ‘point-of-breakdown’ from the early 2018 top. We would expect this to then hold at first for another consolidation phase but would view this as temporary ahead of a move to our 1.4302/77 original target from September – the 50% retracement of the move from 2014 and key highs of 2018.” 

“Although we still expect 1.4377 to cap at first, the magnitude of the base is expected to take the market higher in due course to a cluster of resistances in the 1.4984/1.5136 zone – the June 2016 Brexit referendum high, the 61.8% retracement of the entire decline from 2014 and the 38.2% retracement of the entire 2007/2020 bear market. We note that the textbook ‘measured base objective’ is set even higher at 1.5561, although we would stress that this level is unlikely to be reached during 2021.”