GBP/USD: Break above 1.4203 to clear the way for a retest of key highs at 1.4238/49 – Credit Suisse

GBP/USD weakness has again been well supported. Above 1.4203, cable can ease the threat of a fresh setback for a retest of the 1.4238/49 highs, analysts at Credit Suisse report.

Continued strong buying on weakness to reinforce the broader uptrend

“Weakness in GBP/USD following another bearish ‘outside day’ has yet again been well supported just below the 1.4082 recent low, never mind the ‘neckline’ to the March/May base at 1.4017/06. The subsequent strong recovery reinforces in our view the likelihood that recent ranging and weakness remains a temporary phase before the core trend turns higher again.” 

“Above 1.4201/03 remains needed to ease the threat of further corrective weakness for a retest of the 1.4238/49 highs. An eventual clear break above here remains expected for a resumption of the core uptrend to our 1.4302/77 first broad core target zone – the 2018 highs and 50% retracement of the 2014/2020 bear trend.” 

“Support at 1.4126/22 ideally holds to keep the immediate bias higher. Below can see a retest of 1.4082/72, with this seen as the trigger to a test of what we still see as more important and stronger uptrend and ‘neckline’ support at 1.4035/06.”