Forex Flash: RBS sees the lower end of range breaking; 1.5235 is the key

FXstreet.com (San Francisco) - After declining from the 2013 highs at 1.6340 reached in January 2dn, the GBP/USD found support at the lowest level since June 2010 at 1.4830. Following that movement, the cable tried to recover ground but the movement was capped at 1.5405 in April 11 with the pair falling back to trade just above the 1.5200.

The GBP/USD has been trading close to the 1.5200 level in the last four sessions with the Cable trading in range between 1.5215 and 1.5275. RBS' senior strategist Paul Robson pointed in a recent report that "between mid-2010 and early 2013, 1.5235-1.5450 appeared to offer strong support for GBP/USD." Accordingly, Robson stated that "having broken through 1.5235 in early March, the bottom of the zone turned to resistance."

On the upside, "1.5400 is the 38.2% fibo retracement of the early 2013 decline. So for the topside, 1.5400/25 looks key, either on a rejection or break." On the downside Robson continues, "a confirmed break of 1.5235 would seem set to lead to a resumption of the down-trend."

"Given the relative performance of the US economy and likelihood that the BoE resumes its asset purchases," RBS continues "to see the lower end of range breaking," concluded Robson.

RBS's forecasts for the GBP/USD are: First down to 1.4600 in June, then up to 1.4900 in September to close the year flat at 1.4900 in December.