GBP/USD could head towards 1.22/1.2190 – Commerzbank

According to Karen Jones, Head of FICC Technical Analysis Research at Commerzbank, Cable’s downside could extend to the 1.22/1.2190 area.

Key Quotes

“GBP/USD completed its symmetrical triangle at 1.2929 and has eroded the 1.2797/50 July low and the long term Fibonacci support (78.6% retracement of the move from 1985 to 2007). The close below here is regarded as very negative and targets circa 1.22/1.2190 (this is the approximate measurement down from the symmetrical triangle pattern)”.

“We have a near term resistance line at 1.2980 (nearby high is 1.3056) and will consider that the market remains directly offered below here. We view the September high at 1.3443 as an interim high. Only if it and the late June high at 1.3534 were to be overcome would we neutralize our medium term negative outlook”.