SocGen expects Cable to drop further

GBPFrom Societe Generale:

GBP/USD has given a dual break below an upward weekly channel and the 21-week moving average. The pair is poised to drift lower towards May lows at 1.6690/30, also the 23.6% retracement of the up move since 2009. It is to be noted that 1.6690/30 is also the upper limit of a multiyear channel drawn since 1993 and is as such a key support. Monthly indicator has rolled over after testing multiyear trend line and weekly indicator too has breached a graphical support indicating likelihood of an even deeper correction. Short-term rebound should find resistance at 1.6920, the 38.2% retracement from July highs. Only a break above 1.6920 will indicate a corrective pullback towards 1.7025/90.

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