Karen Jones, analyst at Commerzbank, suggests that GBP/USD pair remains on the defensive and attention is on the August, October and mid-January lows at 1.2696/62.

“We note the oversold daily RSI and the TD perfected set up on the daily – both of which suggest the 78.6% retracement at 1.2644 will hold. Minor resistance comes in at the 1.2865 April low. Immediate downside pressure will be maintained while no rise above the 200 day moving average at 1.2956 is seen. Next up is the May 10 high at 1.3048. Only if this level were to be exceeded, would we look for the 1.3185/97 April and current May highs as well as the 61.8% Fibonacci retracement to be retested. This currently looks unlikely.”