gbpusd1506GBP subsequently dropped to 1.2473 before rebounding quickly. While downward momentum has waned somewhat, there is no indication that the current weakness has stabilized. From here, GBP could test the 1.2450 support first before a more sustained recovery can be expected (minor support is at 1.2475). Resistance is at 1.2545 followed by 1.2580.

The current pullback is viewed as a corrective pull-back that has scope to extend to 1.2450, possibly as low as 1.2400. On the upside, if GBP moves back above 1.2650 (‘strong resistance’ level was at 1.2680 last Friday), it would indicate the corrective pull-back has run its course.