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Technical analysis from Credit Suisse reveals Pound Sterling is on target to test levels close to 1.21 as a "significant trend" higher extends that could - in the longer term - eventually deliver levels above 1.30.

The bullish assessment comes from Credit Suisse's technical analysis team who see the Pound to Euro exchange rate subject to bullish signals on multiple timeframes.

The immediate picture sees Credit Suisse anticipating a test of long-term support in EUR/GBP at 0.8281/17. "Removal of which would complete a major top," says David Sneddon, a technical analyst at Credit Suisse.

(This makes for a test of resistance in GBP/EUR at ~1.2075/1.2170 as a major bottom completes).

Sneddon identiefies a bearish "outside day" for EUR/GBP on the weekly charts "as the market reverses its albeit brief move above its 13-day exponential average".

Image courtesy of Credit Suisse.

Reference rates at publication:

GBP to EUR: 1.1995High street bank rates (indicative): 1.1675 - 1.1760Payment specialist rates (indicative: 1.1887 - 1.1935Find out more about specialist rates and service, hereSet up an exchange rate alert, here"We maintain our core negative bias for a test of long-term support at .8281/17," says Sneddon of EUR/GBP.

He says these form the pivotal lows of 2019 and 2020 and the 50% retracement of the 2015/2020 bull trend.

"Whilst this key support should continue to be respected, we remain biased to an eventual break lower," says Sneddon.

The analyst says "a sustained move below 0.8217 should confirm the completion of a multi-year top and significant change of trend lower".

In GBP/EUR terms, this means a sustained move above ~1.2170 confirms the completion of a multi-year bottom and opens the door to a significant change of trend higher for Sterling.

Analysts would then see support for EUR/GBP come into view at 0.8118 initially, the April 2016 high, then the 61.8% retracement of the rise from 2015 at 0.7913.

These two numbers equate to ~1.2318 and ~1.2637 in GBP/EUR terms.

"Big picture we would look for a fall to 0.7494/84," says Sneddon. (1.3344/1.3362 in GBP/EUR).

Above: GBP/EUR chart showing the levels mentioned shown in the analysis.

Should the Euro rediscover its feet in the near-term then Credit Suisse techs are looking for gains to meet resistance at 0.8349 initially, with 0.8380 "now ideally capping to keep the immediate risk lower," says Sneddon.

In GBP/EUR terms this means any selling pressure on Sterling would find support at 1.1977 and then 1.1933.

Above can instead mark a near-term base, for strength back to 0.8420. (~1.1876 in GBP/EUR).