GBP/USD: 1.2170/1.2100 is next potential support zone – SocGen

The Pound continues to struggle as September draws to a close. Economists at Société Générale analyze GBP outlook.

Heading towards 1.2170/1.2100

GBP/USD confirmed a Head and Shoulders and subsequently gave up the 200-DMA resulting in steady decline. 

Daily MACD is now within deep negative territory denoting a stretched move however signals of reversal are not yet visible. 

The pair is expected to drift towards target of the formation near 1.2170/1.2100.  Achievement of these objectives could result in a bounce. However, reclaiming the 200-DMA near 1.2430 would be essential to affirm a meaningful uptrend. Holding below this MA, the phase of downtrend is likely to persist.