GBP/USD risks further downside near term – Commerzbank

In light of the recent sell off, Cable could drop further and reach 1.2866, suggested Axel Rudolph, Senior Analyst at Commerzbank.

Key Quotes

“Since GBP/USD’s fall to its current August low at 1.2920 has been accompanied by positive divergence on the daily RSI we may well see a day or two of consolidation above this level”.

“Failure at 1.2920 would push the August 2016 low at 1.2866 to the fore. Further down sit the July 2016 low at 1.2797 as well as the December 2016 and January 2017 highs at 1.2775/1.2706. Still further down the June 2017 low can be spotted at 1.2590”.

“Over the next few days the risk remains on the downside while trading below the 1.3173 July 30 high. Minor resistance below this level comes in at the 1.3049 and 1.3102 late June lows”.