GBP/USD: Mature downtrend persists - Westpac

According to Tim Riddell, Research Analyst at Westpac, the GBP/USD’ s late Feb. break below 1.2400 not only negated upside squeeze potential but also opened the risk of retesting the lows between 1.1840-1.2000.

Key Quotes

“Daily momentum has broken lower from neutral levels and adds to the potential of an interim flush to re-affirm range lows.”

“Weekly

• Weekly momentum is in neutral territory, but price action has faltered. A retest of range lows is becoming more likely
• However, range trading should persist. Although GBP remains at risk of another downside flush, such a flush could also allow for a broader base to develop”

“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 is at extreme lows, but is yet to make a genuine turn. Until it does, risk of a further (final) flush remains high.”