GBP/USD: Recovery limited below 1.3175 - Lloyds  Bank

Analysts from Lloyds Bank, point out that the GBP/USD pair needs to break above 1.3175 to suggest that a stronger recovery is taking place.

Key Quotes:

“We move into the 4th day of a consolidation phase over key support in the 1.2800 region and 1.3050 resistance. A rally through this resistance and then 1.3175 above is needed to suggest a broader recovery is developing. Until then, price action is seen as a pause within the underlying down trend. 1.2725-1.2650 is next support on a break of the lows.”

“Long term, the decline through the 2009 lows at 1.35 is viewed as the last phase in the bear trend that started back in 2007 from the 2.1160 highs. We doubt we will get a V-shape recovery. More likely we see a broader multi-month bottoming process. What isn’t clear yet is whether we start to develop this base around the 1.28 region, or at lower support levels in the 1.22-1.18.”