Technical Update - GBPUSD set to resume downtrend. Multi-decade cycles indicate down trend until 2025. Parity in sight Technical Update - GBPUSD set to resume downtrend. Multi-decade cycles indicate down trend until 2025. Parity in sight Technical Update - GBPUSD set to resume downtrend. Multi-decade cycles indicate down trend until 2025. Parity in sight

Technical Update - GBPUSD set to resume downtrend. Multi-decade cycles indicate down trend until 2025. Parity in sight

Forex 4 minutes to read
Kim Cramer Larsson

Technical Analyst, Saxo Bank

GBPUSD: Downtrend seems to resume after nice rebound to 0.618 retracement. Lows around 1.03 could be tested. 
Historically, GBPUSD has been moving in cycles of approx. 8 years with 1.40 as major support and pivot level. Cycle length indicates downtrend could extend until 2025 dropping below parity in the process.

GBPUSD has rebounded to the 0.618 retracement of the recent sell-off around 1.12. Buyers seem to run out of steam and down trend Is likely to resume.
If GBPUSD takes out today’s high at 1.1235 it is likely to continue to around 1.14. 1.14 is the 0.786 retracement but more importantly it was the key support prior to the massive sell-off.
However, the picture is bearish. RSI is bearish with no divergence indicating likely lower levels. 
If GBPUSD takes out 1.0535 all-time low at around 1.03 is quite likely to be taken out.

Source: Saxo Group

Weekly chart: GBPUSD retraced 0.236 of the entire down-trend since 1.4250 peak in 2021. Also, on weekly RSI there is no divergence indicating lower levels.

Source: Saxo Group

So how low are we talking about? The Monthly chart going back 50 years might provide an estimate.
Going back to the 1970’s it seems like GBPUSD has been moving in cycles of approx. 96-98 months i.e., around every 8th year. 1.40 has been the Pivot point and key support since 1985. That was until 2016 when GBPUSD broke below with a bang. Since then, GBPUSD has failed to stay above 1.40 for long, being send back below 1.40 every time. And now it seems as it could take many years before it gets even close to that level again.

There are several scenarios that could unfold until the current cycle ends in End-2024/2025. Illustrated by the vertical coloured arrows. If GBPUSD is to move as much as the distance from 1.40 to the three peaks since 1985 in the opposite direction i.e., down, there could be much more down side in store for Sterling.
GBPUSD has already moved same distance as the 2015 peak to 1.40 and then some (green arrow) i.e. 30 big figures.
If GBPUSD is to move as much as the distance from 1.40 to peak in the 1990’s it would drop to around 0.80. (purple arrow).
2.0 Projection of the 2020-2021 correction is at 0.85. GBPUSD dipped to 1.382 projection a couple of days ago. 

RSI is still above the 1985 lows where market turned around after being well below 1.40. If GBPUSD takes out the 1.03 low from this week it could find some support at the lower falling trend line in what looks like a big falling wedge like pattern, and at the
1.618 Projection at around 0.9655. That level is also the 1.618 projection of the 1.40 support/pivot level to 2.116 peak in 2007.

Of course, similar to EURUSD, parity will be a massive psychological support level where a lot of fighting is to take place between Bears and Bulls, and maybe a Central bank or two. 
If GBPUSD drops to 0.9655 the RSI is likely to test the 16 level where a bounce could be seen.
To demolish this - or these - bearish scenarios a move back above 1.40 is needed. Indication of that to play out would be a close above the upper falling trend.

Source: Saxo Group
Monthly chart with cycles and Fibonacci levels - zoomed in
Source: Saxo Group

Quarterly Outlook 2024 Q3

Sandcastle economics

01 / 05

  • Macro: Sandcastle economics

    Invest wisely in Q3 2024: Discover SaxoStrats' insights on navigating a stable yet fragile global economy.

    Read article
  • Bonds: What to do until inflation stabilises

    Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain inflation and evolving monetary policies.

    Read article
  • Equities: Are we blowing bubbles again

    Explore key trends and opportunities in European equities and electrification theme as market dynamics echo 2021's rally.

    Read article
  • FX: Risk-on currencies to surge against havens

    Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperform in Q3 2024.

    Read article
  • Commodities: Energy and grains in focus as metals pause

    Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities in Q3 2024.

    Read article

Saxo Capital Markets (Australia) Limited prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication.

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments.Saxo Capital Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Capital Markets or its affiliates.

Please read our disclaimers:
- Full Disclaimer (
- Analysis Disclaimer (
- Notification on Non-Independent Investment Research (

Saxo Capital Markets (Australia) Limited
Suite 1, Level 14, 9 Castlereagh St
Sydney NSW 2000

Contact Saxo

Select region


The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit

Saxo Capital Markets (Australia) Limited ABN 32 110 128 286 AFSL 280372 (‘Saxo’ or ‘Saxo Capital Markets’) is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms, Financial Services Guide, Product Disclosure Statement and Target Market Determination to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Saxo Capital Markets does not provide ‘personal’ financial product advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Capital Markets does not take into account an individual’s needs, objectives or financial situation. The Target Market Determination should assist you in determining whether any of the products or services we offer are likely to be consistent with your objectives, financial situation and needs.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website is not intended for residents of the United States and Japan.

Please click here to view our full disclaimer.