GBP/USD room for a test of 1.3040 – Commerzbank

A breakdown of 1.3290 could open the door for a test of 1.3040 in Cable, suggested Karen Jones, Head of FICC Technical Analysis at Commerzbank.

Key Quotes

“GBP/USD is sitting on support at 1.3302/20, the mid-December low. Given the 13 count and the oversold RSI it is possible that this will hold the initial test. However rallies will be viewed as corrective opportunities to reinstate short positions. Below 1.3290 will trigger losses to the 1.3040 October low”.

“Currently intraday Elliott wave counts are pointing to a 1.3470/1.3570 move. The March low lies at 1.3712. Rallies are expected to remain capped by the 1.3840 55 day moving average and while below here the market will remain directly offered”.