GBP/USD: Spotlight turns back to key 200-DMA at 1.2704/06 – Credit Suisse

GBP/USD has pushed strongly higher to leave the spotlight back on key resistance from its 200-day average and downtrend from late last year at 1.2704/06. Above this level, the cable would mark a significant break higher with resistance next at 1.2808/17. Eventually, analysts at Credit Suisse target the long-term downtrend from 2015 and February and March highs at 1.3139/1.3215.

Key quotes

“GBP/USD has pushed strongly higher to leave the spotlight back on key resistance from its 200-day average and downtrend from late last year at 1.2704/06. Whilst a fresh rejection from here should be allowed for upside momentum looks to be building and a close above 1.2706 would suggest we are seeing a more important turn higher, opening the door to a retest of 1.2808/17 next – the June high and 78.6% retracement of the entire fall from late last year.” 

“Big picture, we think this can clear the way for a challenge on what we view as much more important resistance starting at 1.3139 and stretching up to 1.3200/15 – the long-term downtrend from 2015 and February and March highs – which we look to prove a tougher barrier.”

“Support is seen at 1.2650/43 initially, below which can ease the immediate upside bias with support then at 1.2574/70, with the immediate risk seen staying higher whilst above 1.2512. Below would reinforce the broader sideways range, with support seen next at 1.2480, then more importantly at 1.2463/53.”