GBP/USD: Head and Shoulders pattern points towards potential downside – SocGen
|Economists at Société Générale analyze GBP/USD technical outlook.
Support 1.2590, resistance 1.2820
GBP/USD has pulled back towards the trend line drawn since last November and is near intermittent support of 1.2590 representing the low of June. Interestingly, it has formed a Head and Shoulders pattern which generally points towards potential downside.
If the pair fails to defend the neckline at 1.2590, there could be risk of a deeper down move towards 1.2480, the 23.6% retracement from last year and 1.2300.
Left shoulder at 1.2820/1.2870 must be overcome for negating the pattern.
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