Short-term rallies in GBP/USD and EUR/USD will provide strategic selling opportunities, says George Davis, Chief FIC Technical Analyst at RBC Capital Markets.

For GBPUSD, Davis thinks a close above 1.2484 would favour a further move to the 1.26 area (see Chart). As such his 1 to 3 month target for Cable is 1.2550 and he recommends establishing strategic short positions between 1.2608 and 1.2798 (a key resistance level).

Conversely, he thinks a daily close below 1.2225 would end the corrective phase and favour a deeper selloff to 1.2090.

See Chart.