GBP/USD: Resistance at 1.3658/75 to cap for a fall back to 1.3411 – Credit Suisse

GBP/USD has rebounded sharply. However, strength stays seen as corrective with 1.3658/75 ideally capping, in the view of economists at Credit Suisse.

See – Double shock in the United Kingdom: exit from the COVID-19 crisis and Brexit – Natixis

Risk to turn lower again

“Support is seen at 1.3578/76 initially, with a break below 1.3532 needed to suggest the risk has indeed turned lower again for a fall back to the 1.3411 low of last week.” 

“Beneath 1.3411 in due course should see support next at 1.3350/43 ahead of a more important cluster of supports including the 38.2% retracement of the entire 2020/2021 bull trend and December 2020 lows at 1.3189/35. Our bias would then be for a floor to be found here, at least at first. Should weakness directly extend, we see support next at 1.2855/29.” 

“Resistance remains seen at the 13-day exponential average and price resistance at 1.3658/75, which ideally still caps. A close above here would suggest the recovery can extend further to what we look to be tougher resistance at the recent reaction high and 55-day average at 1.3752/75.”