GBP/USD: Risk to stay lower and test the 55-day average at 1.2409 – Credit Suisse

GBP/USD extends its rejection of 1.2817 – the 78.6% retracement of the fall from last December – and analysts at Credit Suisse stay biased lower with support seen at 1.2535/33, then 1.2482/79 before a test of the 55-day average at 1.2409. 

Key quotes

“Support is seen at 1.2535/33 initially – the 38.2% retracement of the rally from mid-May – below which can keep the immediate risk lower with support then seen next at 1.2501 and then 1.2482/79 – the 23.6% retracement of the entire uptrend from the March low. Whilst we think this holds at first, we look for a break below here also to see a test of the 55- day average, currently at 1.2409. With the uptrend from March not far below at 1.2384, we look for better support here.” 

“Resistance is seen at 1.2619/21 initially then 1.2663, with the 200-day average and price resistance at 1.2685/92 ideally capping to keep the immediate risk lower.”