GBP/USD: Scope for further weakness yet to 1.3376 – Credit Suisse

GBP/USD has removed with ease support from the 38.2% retracement of the December/January rally at 1.3532/28. Analysts at Credit Suisse see scope for further weakness to the ‘neckline’ to the December base at 1.3376.

Resistance seen at 1.3526

“Cable is testing support from its rising 55-day average at 1.3422, but we see scope for a n overshoot beyond here to the 61.8% retracement at 1.3393, then the ‘neckline’ to the December base at 1.3384/76. We would look for an attempt to hold here. A direct break though would warn of a retest of medium-term support at 1.3189/35.” 

“Near-term resistance moves to 1.3470, then 1.3492, with the immediate risk now seen staying lower whilst below 1.3526. A close above here can reassert a choppy range to clear the way for strength back to 1.3556/67 next.”