GBP/USD: Downtrend appears mature, risk of a final flush remains after rebound falter again – Westpac

Daily momentum of GBP/USD pair is low but negative as after failing to breach 1.3055 GBP rebounds have been very corrective and a close above 1.2820 is needed to avoid further slides, according to Tim Riddell, Research Analyst at Westpac.

Key Quotes

“GBP is at risk of sliding through its central congestion zone (1.2390-1.2640) into July, even though this is still seen as range defining.”

“Weekly

• The notable turn in weekly momentum affirms the defining of range resistance on the recent limited forays above 1.30 and could force a slide to the 1.20-1.22 area
• Weekly momentum remains supportive, but could easily roll over from current high levels. Again, subsequent GBP slippage would be considered to be range defining’

“Monthly

• The maturing of the downtrend from 1.70’s is still the key long term development and monthly momentum remains supportive, suggesting that a base is forming
• Recent rebounds proved to be corrective, but further downside flushes could well complete the broader downtrend and may be relatively contained”