Tim Riddell, Research Analyst at Westpac, explains that failure to reach the retracement level of 1.3055 leaves GBP at risk of pullbacks back to the perceived pivot level of 1.2615 while interim resistance lies at 1.2900-25.
“Daily momentum has turned negative from relatively extreme levels. Although price action is seen as corrective, failure at 1.2615 could signal a full retest of 1.20.”
- Rebounds appear to have been neatly contained by both channel and retracement resistance which suggests that gains were corrective
- Weekly momentum remains supportive, but could roll over from current relatively high levels. However, such slippage would be considered to be range defining”
- 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
- Downtrend now appears mature. Risk of a final flush remains as rebound falter.”