“GBPUSD has completed a bearish “pennant” formation on last week’s break below former trendline/range support now at 1.3200.
We look for a test of the July 2016 low at 1.2798 next. However, bigger picture we look for an eventual break below here to then test our next target at the 78.6% retracement of the 1985/2007 rise at 1.2752. We would expect this to hold initially, but below it can target pattern objectives at 1.2433 then 1.2000, with scope for 1.1855
Resistance shows at 1.3155/85 initially then 1.3373. Above 1.3413/82 is needed for a base.
*CS maintains a limit order to sell GBP/USD at 1.3155 targeting 1.2752.
GBPJPY remains under heavy pressure and given that we also remain bullish JPY (c.f. JPY remain in a core bull trend 5th Aug 2016) we expect to see further weakness to retest this year’s low at 128.81. Capitulation beneath here can see the core downtrend resume for 118.80 initially, with the major 2011 low at 116.84 expected to provide a floor.
Resistance moves to 136.26 then 139.93/140.15 with a bigger barrier seen at 1422.22/143.93. Selling is expected at the latter level and above it is needed to set a base again and open up strength to 146.36.
EURGBP has extended its rally from support at .8252/43 and we remain bullish for a break above the July 2016 high at .8640 to test the 61.8% retracement of the 2008/15 fall at .8706, potentially .8816. We would expect a cap at the latter level.
Below .8252/43 can see a retreat back to 8120/18, potentially .8000/.7995, but with a floor expected here.
*CS booked profit today on its long EUR/GBP from 0.8380 at 0.8620″.
Copyright © 2016 Credit Suisse, eFXnews™
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