Pair’s failure to stay above the post BOE high of 1.3472 in Asia followed by a retreat to 1.34 handle despite inverse head and shoulder breakout on 4 hourly chart on Thursday suggests the correction from post Brexit sell-off may have temporarily run out of steam and amid oversold hourly RSI could yield a re-test of inverse head and shoulder neckline level of 1.33.
Dips could be met with fresh offers unless the US advance sales retail sales release is super strong, in which losses could be extended further to 1.3230 (rising trend line support on hourly). Only a day end closing below 1.3230 would suggest bullish invalidation and open doors for a re-test of 1.30 handle.
On the other hand, daily closing above 1.33 today (appears likely in case of weak US data) would add credence to bullish inverse head and shoulder breakout and open doors for a more sustained rally towards 1.3641 (38.2% of 1.5019-1.2789).