GBP/USD: Downside potential extends to 1.18 on a break under the low 1.21 zone – Scotiabank

GBP/USD struggles as charts warn of a potential downside move, economists at Scotiabank report. 

Cable prone to a bit more weakness in the short run

The GBP’s inability to recover from the sharp fall in spot seen late last week leaves Cable prone to a bit more weakness in the short run at least.” 

“Key support on the hourly chart is 1.2105.”

“The GBP may be trying to set up a Head & Shoulders top/reversal, with the low 1.21 zone shaping up as key support (neckline trigger) if that is the case. Downside potential extends to the 1.18 zone if this pattern develops and breaks down.”

“Resistance is 1.2320/40.”