GBP/USD: Downtrend now appears mature - Westpac

Tim Riddell, Research Analyst at Westpac, explains that the pronounced rise of GBP/USD pair of above 1.2615 (a key pivot now) suggests a test of the initial Brexit vote spike low and retracement level at 1.3055.

Key Quotes

“Daily momentum remains supportive, but is at extremes. Price action appears corrective, so any faltering could trigger a sharp slide back to the 1.2615 pivot”

“Weekly

• Weekly momentum has broken higher to support a further squeeze towards retracement levels in the 1.31 area (could even risk a spike towards 1.34)
• However, price action off the 1.1840-1.20 area remains corrective and a retest of this area remains a likely scenario once corrections show signs of faltering”

“Monthly

• The maturing of the downtrend from 1.70’s continues with monthly momentum becoming more supportive
• Current rebounds are seen as corrective, but further downside could complete the broader downtrend and could be relatively limited”