GBP/USD expected to re-test 1.2418/35 – Commerzbank

Karen Jones, Head of FICC Technical Analysis at Commerzbank, sees the likeliness of Cable to drop to the 1.2418/35 band.

Key Quotes

“Sterling is side lined r very near term. It has yet to close below the 55 and 100 day moving averages circa 1.2418/35 but we look for this to happen shortly. Intraday Elliott counts are conflicting, but overhead the market faces the channel at 1.2635 and the 200 day ma at 1.2646. Below 1.2347 (Feb low) would cast attention back to the 1.2110 recent low. This is considered to be the last defence for the 1.1988 January low”.

“Key near term resistance is the top of the channel at 1.2635. Only above the 1.2707 February high would allow for further strength to the 1.2776 December high to be seen. Between it and 1.2836 lie several Fibonacci retracements and major resistance and we suspect that it will fail there”.