GBP/USD: Defending 1.3670 is crucial for averting deeper downward move – SocGen

GBP/USD overcame the graphical level of 1.3510 after which the upward move extended towards 1.4240. Cable has formed a double top here, suggesting that a plunge to the 1.3670 mark is on the cards, analysts at Société Générale report.

GBP/USD to resume the uptrend on a break above 1.4240

“The cable has not been able to overcome the 1.4240 peak, on two occasions forming a double top pattern. This is a significant hurdle that must be crossed for the uptrend to resume.” 

“The pair is now challenging the trend line drawn since May last year. Weekly MACD is in positive territory; however, it has dipped below its trigger since witnessing crisscross price action around it. These developments denote that momentum could be shifting towards the downside.” 

“A revisit of the neckline of the formation at 1.3670 can’t be ruled out. This will be an important level. Should this get violated, the next objectives will be at 1.3510 and 1.3130, a 38.2% retracement from March 2020.”