GBP/USD potential visit to the 1.2580 region – Commerzbank

In light of the recent price action, Cable could slip back to the 1.2580 region, where is located the 200-day sma, suggested Karen Jones, Head of FICC Technical Analysis at Commerzbank.

Key Quotes

“GBP/USD has sold off sharply after the UK general election in which May has been weakened. The market has broken down from the 1.2775-1.3060 range. The intraday Elliott wave count see suggesting that we will see a retracement into the 1.2825/60 band ahead of losses. We look for losses to extend to the 200 day ma at 1.2578 and then the 1.2468/61.8% retracement. There is potential for the 1.2366 the 10th April low”.

“The rally will find initial resistance offer by the range above 1.2775, the 20 day ma lies at 1.2915. But only above 1.3060 would target the 1.3446 September 2016 high”.