Bearish momentum is increasing for GBPUSD as key retracement levels give way, according to George Davis, Chief FIC Technical Analyst at RBC Capital Markets.
Davis says a break below 1.3216, the 50% retracement of the August to September rise, will open up the next level at 1.3111 (the 61.8% retracement), followed by 1.2982 (the 76.4% retracement). Meanwhile, studies such as the RSI continue to display bearish momentum. Davis points out that firmer support comes from the long-term trendline at 1.2944 (see Chart).
As such, Davis’ one to three month target is at 1.3000. However, a close above 1.3341 would end the correction and negate this view.