GBP/USD - Immediate outlook neutral despite violation of downtrend line

Karen Jones, Head of FICC Technical Analysis at Commerzbank, says the immediate outlook is neutral, given the failure to clear 55-day MA despite the violation of the short-term falling trend line.

Key quotes

'We remain unable to rule out a move to 1.3338/43. While it holds here, our attention remains on the 1.3076 2016-2017 uptrend."

"The 1.3076 level represents the breakdown point to 1.2830/1.2774, the 38.2% retracement and August low, and the 1.2575 50% retracement. The recent October high and the 50% retracement at 1.3338/43 continue to act as a short-term ceiling for the market."

"Where are we wrong? Above 1.3343 (50% retracement) would trigger a deeper recovery to potentially 1.3417/1.3515, the 61.8% and the 2014-2017 downtrend."

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"Short Term Trend (1-3 weeks): The cross has failed at the 2014-2017 downtrend line."

"Long-term trend (1-3 months): A close below the 1.3049 uptrend will be viewed very negatively."