A bearish “reversal week” has been followed by a move below the prior April low and the 61.8% retracement of the rally from March at 1.3966/65, completing a top and putting GBPUSD firmly on a bearish footing, according to David Sneddon and James Gilbert at Credit Suisse in London.
Sneddon and Gilbert say support is next seen at 1.3889, then 1.3861/54, though they think the next meaningful support will come from the February low and 38.2% retracement of the rally from October at 1.3712/02. Should the price move below here, Sneddon and Gilbert say it would mark the completion of a larger and more important double top (see Chart).
To the upside, Sneddon and Gilbert see resistance at 1.3978, then 1.3993/94, with the immediate risk seen staying low while the pair remains below 1.4031. A break above this level would see resistance back at 1.4092/99.