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The downtrend in the Pound to Dollar exchange rate (GBPUSD) is not complete, according to a new technical analysis conducted by Société Générale.

A new technical strategy update from the French-based international lender and investment bank finds that the current pause will most likely resolve to the downside.

"GBP/USD has embarked on a steady downtrend after confirming a Head and Shoulders formation. It has recently achieved the target for the pattern and formed an interim low at 1 2035," says Tanmay G Purohit, a technical strategist at Société Générale.

Above image courtesy of Société Générale.

GBPUSD fell 8.40% from peak to trough in the July-September period, but the exchange rate has since stabilised and has hovered in the 1.2050-1.23 region over the course of October.

"The decline has paused; however, signals of a large upside are not yet visible. The 200 DMA near 1.2440 is an important resistance near term Inability to cross this would mean persistence in down move," says Purohit.

The Soc Gen strategist says the next potential supports are located at 1.1980 and the March low of 1.1800 ahead of 1.1745.