After failing to break above its 200-day moving average GBPUSD is now looking vulnerable, according to David Sneddon and his team at Credit Suisse in London.
Sneddon points out that GBPUSD completed a minor top following its rejection of key resistance at the 200-day moving average (at 1.2656, see Chart). He says a move below the 38.2% retracement of the April rally at 1.2407/05 has reinforced the top and the likelihood of a more important turn lower towards the 1.2176/66 corrective low and 38.2% retracement of the entire rise from March. A break below 1.2176/66 would open up a move to the 50% retracement at 1.2030, then 1.1884, with eventual scope for a fall to the 1.1412 low in the longer term.
Conversely, Sneddon says a move above the 200-day moving average at 1.2648/56 would instead see the rally extend further with resistance seen next at the 61.8% retracement of the fall from 2019 at 1.2711. With the February point-of-breakdown low not far above at 1.2726, he would look for a fresh top here if reached.