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The GBP/USD pair looks to be stabilizing above its 55-day moving average at 1.3761 and weakness stays seen as corrective prior to the core bull trend resuming towards the recent reaction high at 1.4017, economists at Credit Suisse appraise.

See:  GBP/USD holds two-month downtrend at 1.3827 to resume its advance – Commerzbank

Key quotes

“GBP/USD weakness has been well supported above price support at 1.3776 and with the 55-day average not just below here at 1.3761 and with the market back above its 13-day exponential average, the risk looks to be building the worst of the corrective setback may already be over. Above the 38.2% retracement of the recent sell-off at 1.3954 is needed to add weight to this view for a retest of the recent reaction high at 1.4017.”  

“Beyond the 1.4017 level is needed to suggest a fresh base is in place for a resumption of the core uptrend back to the 1.4237 current cycle high, then our first core upside target of 1.4302/77, which includes the key highs of 2018 and 50% retracement of the fall from 2014.”

“Support is seen at 1.3918 initially, then 1.3880, with a move below 1.3846 needed to reassert a bearish tone again for a fall back to retest 1.3779/61, where we would again look for a floor. A break though would warn of a test of the medium-term uptrend from March 2020, today seen at 1.3689.”