GBP/USD potential for further downside – Commerzbank

In view of Karen Jones, Head of FICC Technical Analysis, Cable could see a deeper retracement, likely to hold in the 1.2515/1.2420 region.

Key Quotes

“GBP/USD had a 13 count on the 240 minute chart yesterday and today we have one on the daily – for caution we are exiting our longs as the risk is that we will see a deeper sell off. Dips lower are indicated to hold circa 1.2515/1.2420. Currently we remain unable to rule out further strength to the 1.2776 December high. Between here and 1.2836 lies several Fibonacci retracements and major resistance and we suspect that it will struggle here”.

“The market is bid above the 55 day ma at 1.2417 and the near term risk remains on the topside. We suspect that prices will need to go sub 1.2250 in order to alleviate immediate upside pressure. Support at 1.2250 guards the 1.1988/80 recent low”.