Buy the pull back in GBP/USD – Natixis

Natixis weekly FX Trends report makes a compelling case in favor of buying the GBP/USD pair on dips towards 1.2458-1.2470 for a first target at 1.2760 with stops below 1.24.

Technical set up

Given that the daily stochastic has turned downward, pullbacks cannot be ruled out towards 1.2458-1.2470 (weekly Bollinger moving average), possibly the support at 1.24 (daily Bollinger moving average). These pullbacks will be an opportunity for the pair to gather its breath before staging a new rebound. The development of an ascending channel in the daily chart and the sharp turnaround of the weekly indicators point to a new wave of rebounds towards 1.2660 before 1.2740-1.2760 (upper band of daily Bollinger and 9- month moving average).

A breakout above these last levels would instil new upward momentum towards 1.2880-1.29 (upper band of weekly Bollinger) before 1.3060 (ascending resistance trendline) and 1.3150 (Fibonacci projection).

Take advantage of any pullbacks towards 1.2458-1.2470 to buy the GBP/USD, with a first target at 1.2760,