GBP/USD: Resistance for a recovery is seen at 1.3706/26 – Credit Suisse

GBP/USD’s weakness has been arrested just ahead of key support at 1.3571/67. Economists at Credit Suisse see scope for a near-term rebound to 1.3706/26.

See: GBP/USD set to break below July lows at 1.3570 – ING

Scope for the recovery from here to extend further

“Resistance is seen at 1.3665 initially ahead of the 38.2% retracement of the decline of last week and back of the broken uptrend at 1.3706/26, which we look to then ideally cap and for the risk to turn lower again.” 

“Above 1.3726 would suggest the recovery can extend further to the 38.2% retracement of the entire July/August fall at 1.3747, potentially as far as the 200-day average at 1.3786/91, but with a better cap expected here.” 

“Support is seen at 1.3639 initially, with a break below 1.3601 seen clearing the way for a test of 1.3571/67. A move below here can clear the way for what we think can be a more sustainable fall with support seen next at 1.3463/51.”