GBP/USD: Negative RSI divergence points to consolidation – Commerzbank

GBP/USD’s RSI has diverged. Axel Rudolph, Senior FICC Technical Analyst at Commerzbank, expects the cable to slump toward the 1.2814 June high whiñe below 1.3284. On the other hand, above 1.3284 GBP/USD will target the 1.35 level.

Key quotes

“GBP/USD last week reversed just ahead of the 1.3284 December high. The new high of 1.3268 was accompanied by a divergence of the daily RSI and this was coupled with a 13 count. We would thus allow for a corrective dip back.”

“While the cable remains below 1.3284 we would allow for a slide to the 1.2814 June high and possibly the 1.2718 support line.”

“Above 1.3284 introduces scope to the 1.3500/15 December 2019 high and the January 2009 low.”