GBP/USD: 1.2798/85 seen holding the initial test – Commerzbank

In opinion of Karen Jones, Head of FICC Technical Analysis at Commerzbank, Cable’s downside is expected to meet strong contention in the 1.2798/85 band.

Key Quotes

“GBP/USD has eroded its early October low at 1.2924 and the 1.2905 61.8% retracement and remains on the defensive. The market recently failed at 1.3298, the September high and 1.3363, the July high and attention is now on the 1.2924/05 October low and Fibonacci retracement. The move below 1.2905 has introduced scope for a slide back to the 78.6% retracement at 1.2798/85 and the 6 th September low, we would allow for this to hold the initial test. This is seen as the last defence for the 1.2662 August low”.

“Resistance at 1.3298/1.3363 guards the 200 day ma at 1.3477”.