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Technical Update - GBPUSD taking out key support 1.23. EURGBP close to be testing 0.87 resistance. Where to next?

Forex 2 minutes to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank Group

Summary:  GBPUSD taking out key support 1.23. Couyld drop to 1.2175 and confirm medium-term down trend
EURGBP close to be testing 0.87 resistance after pattern break out, but could move as high as to 0.88

GBPUSD has broken below key support at around 1.23.
Daily RSI is indicating lower levels are likely.

The two lower falling trendlines on the daily chart are parallel shifted from the upper falling trend line and give an idea of some support.

However, next strong support is at 1.2175. If GBPUSD is dropping to that level it will be extremely oversold short-term.
A rebound/correction should be expected if GBPUSD is dropping to the 1.2175 level.

MEdium-term:  If GBPUSD is closing the week below 1.23 the medium-term trend has been confirmed to be bearish with down side potential to around 1.1840 
gbpusd d 2109
Source all charts and data: Saxo Group
gbpusd w 2109

EURGBP is close to test the peak of the Descending triangle it broke bullish out of a couple of days ago.
RSI is above 60 strongly indicating higher EURGBP levels are likely. A close above 0.87 will pave the way towards 0.88 as indicated by the two vertical arrows.

However, statistically the move after a Descending triangle break out is often cut short at around the 0.618 ratio i.e., at around 0.8737

To demolish this bullish picture EURGBP needs to close below 0.86 and back below the upper falling trend line in the triangle

eurgbp d 2109

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