GBPUSD: Downtrend may be mature but is still in place - Westpac

Tim Riddell, Research Analyst at Westpac, suggests that the GBPUSD downtrend from 1.70’s still appears to be in place and so could extend towards 1.10-1.14 area.

Key Quotes

“Momentum is low, but a clear turn is needed in order to suggest that a base may be forming.”

“Weekly

• Weekly momentum is neutral after recent consolidation and price action on rebounds has remained corrective, merely fulfilling interim retracement profiles.

• Rebounds are still seen as selling opportunities within a maturing downtrend.”

“Daily

• Downside price action continues to be the more dynamic, but recent down-legs are becoming more subdued suggesting that the aggressive declines are over.

• Daily momentum is supportive but the extent of rebounds should be limited to the 1.24’s and leave GBP at risk of another slide below 1.20.”