Ella 
We did not expect GBP/USD to fall sharply to lows of 1.2591 (we expect GBP/USD to trade sideways). As expected, the decline was strong. Nonetheless, GBP/USD remains severely oversold. GBP/USD is likely to break below 1.2580 today, but it remains to be seen if it can gain a foothold below this level. Next support is at 1.2530. To maintain the downside momentum, GBP/USD must stay below 1.2675 (with minor resistance at 1.2640).
Outlook for the next 1-3 weeks: GBP/USD fell sharply to 1.2615 before rebounding strongly, we highlighted yesterday (24 Aug, when prices were at 1.2720) that “momentum has not picked up and we continue to expect GBP/USD to trade sideways despite Will fluctuate in the lower range of 1.2580/1.2780. From here, as long as GBP/USD remains below the strong resistance level of 1.2720, a weakening to 1.2530 or even 1.2480 is possible.
