GBP/USD set to turn back lower towards the 1.3189/35 support zone – Credit Suisse

GBP/USD is correcting higher. However, economists at Credit Suisse maintain their core bearish outlook for 1.3277, then 1.3189/35.

Resistance is seen at 1.3556/69

“GBP/USD is recovering, however, the recent break below support from its 1.3411 September low, the fact that the market remains below falling 13-day , 55-day and 200-day moving averages, the existing large top and bearish continuation pattern, as well as the poor momentum, all support our core bearish outlook.”

“Support is seen initially at 1.3402, then 1.3352/50, below which should reassert the downtrend for support next at 1.3277, ahead of what remains our core objective of 1.3189/35.”

“We continue to expect the 1.3189/35 zone to prove a decent floor and we would look for a fresh consolidation phase to emerge here. A direct break though would further reinforce the negative outlook, with support seen next at 1.3106, ahead of 1.3000 and then 1.2855/29.” 

“This morning’s test above resistance at 1.3450 suggests we may see a near-term rebound to 1.3510, but with the 21-day exponential average and price resistance at 1.3556/69 now ideally capping.”