GBP/USD further downside expected – Commerzbank

Cable’s stance remains negative in the near term, noted Karen Jones, Head of FICC Technical Analysis at Commerzbank.

Key Quotes

“GBP/USD sold off sharply after the UK general election last week. The market broke down from the 1.2775-1.3060 range and this is now expected to act as formidable nearby resistance. The intraday Elliott wave count is suggesting that we will see a retracement into the 1.2800/40 band ahead of losses. We look for losses to extend to the 200 day ma at 1.2575 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 1.2907. But only above 1.3060 would target the 1.3446 September 2016 high”.