Further downside seen in GBP/USD – Commerzbank

The pair is expected to target the 1.2970 area as the selling momentum gathers pace, suggested Karen Jones, Head of FICC Technical Analysis at Commerzbank.

Key Quotes

“GBP/USD last week collapsed down through its 2009 low at 1.3502 and now targets the 1992-2016 support line at 1.2972 (this connects all the lows from 1992-2016)”.

“Below here lies the 1.2750/78.6% retracement of the move from 1985 to 2007, which is the last defense for the 1.0463 1985 low. After such a strong down move it would be ‘normal’ to see a period of consolidation, and currently the intraday Elliott wave counts are implying a return to 1.4100”.

“Rallies will find previous lows at 1.3837 (Feb low) and the 1.4005/15 (April and June low) will offer strong resistance. A downside bias will remain fully entrenched while below the 1.4360/61.8% retracement”.