FX Weekly (25 Sep ’16)

GBP/USD remains under pressure, with sellers extending the fall from the 1.3445 high of 6 September to test trendline support from July.

Falling momentum studies anticipate further downside development towards the 1.2863 low of August, but a close below critical support at the 1.2796 low of July is needed to confirm continuation of the broad multi-month bear trend, turn investor sentiment decisively bearish once again, and open up lows down to the 1.2565 low of June 1985.

A close above congestion around 1.3200 would stabilise prices, but any immediate gains are likely to find difficulty sustaining any break, as investors maintain a sell-into-strength strategy.

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