GBP/USD: Facing a cluster of key levels – Rabobank

GBP/USD plunged sharply to 1.1412 low looking into the daily chart but crucially rebounded at that point. Cable now faces a cluster of key levels that may cap gains, in the opinion of economists at Rabobank.

Key quotes

“GBP/USD crucially produced a very strong rebound that must be sustained above 1.20 pivot to expect further recovery in the very near-term.” 

“The trendline which until very recently provided GBP/USD with support turned into resistance at 1.2665. Even if cleared, sterling may require a very strong bullish catalyst to extend its gains beyond 1.2780/70.”  

“A fall below 1.20 would bring the recently formed bottom around 1.15 under pressure. This must hold to reduce the risk of GBP/USD falling further towards the all-time low at 1.0520.”