Credit Suisse discusses GBP/USD technical outlook and adopts a tactical bearish bias against a move back above 1.2337.
"GBPUSD continues its test of what we continue to view as important support at 1.2286/84 – the 55-day average and price support – which is managing to hold for now on an intraday basis. Despite this, whilst 1.2337 caps the immediate risk stays seen lower and a close below 1.2284 followed by a break of the 50% retracement of the September rally at 1.2270 can then see weakness extend to price support from earlier in September at 1.2234. This though needs to be removed to curtail the basing process, opening the door to a retest of the long-term uptrend and September low at 1.1963/59," CS notes.
"Above 1.2337 can see strength back to 1.2381, but with a break above here needed to add weight to a recovery story with resistance next at 1.2413/14. Above here can see a move back to 1.2499/1.2503, but with a move back above here needed to rekindle thoughts of a base again and a retest of 1.2582," CS adds.