Axel Rudolph, an analyst at Commerzbank, notes that GBP/USD’s recent slide to its current September low at 1.1958 was accompanied by a large divergence on the daily RSI.

• “Since the cross has now risen above the 1.2310 late August high, a bottom formation has been confirmed. Once a weekly Friday close above this level has been made as well, we will change our weekly outlook to a bullish one as well.
• In this case, the May and June lows at 1.2506/59 would be back in the frame. Minor support is seen between the early and mid-August lows at 1.2080/15 and major support at the 1.1958 current September low.
• A slip through the 1.1958 recent low would put the 1.1491 October 2016 low (according to CQG) on the cards.”