GBP/USD to move lower to 1.3717 on a breach of 1.3810 – Credit Suisse

GBP/USD below 1.3810/09 can end thoughts of a “double bottom”, clearing the way for a move back towards the lower end of the broader range at 1.3717, the Credit Suisse analyst team reports.

Cable to end thoughts of a “double bottom” base below 1.3810/09

“GBP/USD is not only back well below the ‘neckline’ to the ‘double bottom’ base at 1.3919 but also its rising 55-day average, throwing a serious question mark over this base. 

“Below 1.3810/09 would see the base fully negated to reinforce the broader sideways range again, albeit with an immediate downside bias. Support would then be seen next at the recent ‘reversal day’ low at 1.3717, below which can clear the way for a retest of the lower end of the sideways range at 1.3670/69. Whilst we would look for a fresh hold here, a break though would now instead complete a bearish continuation pattern.” 

“Resistance is seen at 1.3886 initially, with the immediate risk now seen lower whilst below 1.3919. Above 1.3950 though is needed to clear the way for a retest on the top of the range at 1.4001/17.”