Bank of America Global Research discusses GBP/USD technical outlook and sees a scope for an extended move lower towards 1.31.
"GBP/USD ended its bullish channel in June. In July, it broke below the 200d SMA and March-April support point of 1.3650. Initially, this confirmed a double top with downside targets of 1.3320 and 1.3160. However, the day after the breakdown, a bullish reversal occurred. By rule of thumb, one bearish breakdown is a break and two bearish closes confirms it," BofA notes.
"The August rally held below the 1.40 figure and spot is declining again. It is now back below the 200d SMA. We think this is bearish and that GBP/USD is at risk of declining further in Q3. Note supports at 1.3572 and 1.3505 breaking add to downside risks such as the 1.31s," BofA adds.