GBP/USD choppy, not ready to go sub-1.30 yet – Commerzbank

According to Karen Jones, Head of FICC Technical Analysis at Commerzbank, the stance around Cable remains cautious, although a break below 1.30 seems unlikely for the time being.

Key Quotes

“GBP/USD remains pretty choppy – we would now exercise extreme caution. The pattern could be either a bullish base or a negative triangle. Given the prior sell off the risks must remain on the downside. So tighten stops and wait for the break out – it could be messy!”.

“The intraday Elliott wave continues to suggest some scope for near term recovery. Above here we have the top of the triangle pattern at 1.3433 and 1.3534, the 29th June high and we remain unable to rule out a rally to 1.3638, the 38.2% retracement and potentially 1.4158, the 61.8% retracement of the recent sell off”.

“The intraday Elliott wave count suggests that the market is not ready to go sub 1.30 yet, failure here is needed to trigger a slide to 1.2885/1.2750. Support at 1.2750/78.6% retracement of the move from 1985 to 2007 is regarded as the last defence for the 1.0463 1985 low”.