Credit Suisse analyst team believe GBP / USD has potential to see biggest move in 2021 in G10 block and expect cable to hit 1.4984 / 1 area , 5136 next year.
Key quotes
“We maintain a bullish base outlook for the GBP / USD pair as a clear and sustained weekly close above the critical 2019 high at 1.3514 would mark a major uptrend shift, paving the way for a new in force in 2021. ”
“Our immediate focus remains on the 38.2% retracement of the 2014/2020 drop to 1.3620 after the market reversed from that level last week. While further consolidation is possible below here, a close break should open 1.3710 / 20 next – the 23.6% retracement of the entire 2007/2020 bear market and the ‘break point from the early 2018 peak. We expect this to hold initially for another phase of consolidation, but we see this as temporary before moving to our initial target of 1.4302 / 77 to from September – the 50% retracement of the 2014 move and the key highs of 2018.
“While we still expected 1.4377 to top off initially, base breadth should increase the market in due course due to a resistance group in the 1.4984 / 1.5136 area – the Brexit referendum summit of June 2016, the 61.8% retracement of the total 2014 decline and the 38.2% retracement of the entire 2007/2020 bear market. We note that the handbook’s “measured baseline” is set even higher at 1.5561, although we would like to stress that this level is unlikely to be reached in 2021. “
