GBP/USD: Rebounds appear corrective as a broad consolidation pattern develops – Westpac

In view of Tim Riddell, Research Analyst at Westpac, daily momentum has turned decisively negative for GBP/USD pair and suggests that at least an interim top has formed.

Key Quotes

“GBP looks set to retrace its recent upside moves. Any rebounds are likely to falter in the 1.35’s. If pullbacks gain pace, the standard (1.3110-1.3320) retracement zone could struggle to contain GBP declines.”

“Weekly

• Weekly S/Stochs have yet to turn with conviction, but have (triple divergence) potential to drive a deeper range defining move lower in GBP
• Although bias is that a long term base has formed, patterns evident in weekly charts could easily allow for retracements towards the1.28-1.30 area during 4Q’17”

“Monthly

• The notable upswing in monthly momentum in 3Q’17 underscored the likelihood that a genuine base formed in 1Q’17
• A broad consolidation pattern is likely to involve deep pullbacks to define support, whilst (obvious post-ante!) the 1.3680-1.3880 should define initial range resistance”