Karen Jones, an analyst at Commerzbank, notes that GBP/USD’s recent slide into 35-month lows was accompanied by a large divergence of the daily RSI.

• “It also has not closed below 1.2000 and we have seen as sizeable bounce higher. Rallies will need to overcome the 55-day ma at 1.2343 – this protects the June high at 1.2784. Below 1.1958 (3rd September low) lies the 1.1491 3rd October low (according to CQG).
• Only a rise above the June high at 1.2784 would indicate that a bottom is being formed (not favoured).”