GBP/USD: Downtrend persists, but is now mature - Westpac

Tim Riddell, Resarch Analyst at Westpac, is assessing the price structures in the GBP/USD for 1Q 2017.

• DAILY
  • The break above 1.2400 has triggered near term bias to flip and could allow for a retest of resistance at 1.28, before GBP slides back through its range
  • Daily momentum also broke higher. Although entering extreme levels, it is not (yet) showing signs of turning and so supports a further push higher
• WEEKLY
  • Weekly momentum is mildly GBP supportive, but price action still suggests that a consolidation, rather than base, is developing
  • Any slippage below 1.2400 could trigger a reversal of the current supportive profile and re-instate the bias for another downside flush
• MONTHLY
  • The downtrend from 1.70’s remains firmly in place and could extend to 1.10-1.14 area, but it is also clearly maturing
  • Monthly momentum appears to be turning from extreme lows. Bias remains for a flush lower, but potential is increasing for such a flush to form a longer term base