GBP/USD: Resistance at 1.2639/51 to cap on a closing basis ahead of further weakness – Credit Suisse

GBP/USD has tested key resistance at 1.2633/51. Analysts at Credit Suisse now look for a turn back lower from here.

Close above 1.2633/51 to trigger a deeper correction

“GBP/USD is still stalling around key resistance at the May high and 23.6% retracement of the entire fall from 2021 at 1.2633/51. Given both our bullish USD and bearish GBP view, we have a high level of conviction that the market will fail here and see an eventual resumption of the core downtrend.” 

“Support is seen at 1.2482/39 initially, below which would confirm a small intraday top to turn the short-term risks back lower, with next support at 1.2338/29. Below here open up next support at 1.2218 and more importantly at 1.2167/57.” 

“A close above 1.2633/59 would in contrast trigger an even deeper correction, with next resistance at the 38.2% retracement of the 2022 at 1.2766, then the crucial 55-day average at 1.2805, where we would have greater confidence in a ceiling if reached for a resumption of the broader downtrend.”