3 Apr 2015
GBP could extend the leg lower – JP Morgan
FXStreet (Edinburgh) - According to analysts at JP Morgan, the break of the key range between 1.5356-1.4228 would be indicative of the longer-term direction of the pound.
Key Quotes
“The British Pound remains in a volatile and vulnerable setup into May when the election results and their implications are finally going to be unveiled”.
“Cable has in this context already broken the 2013 low at 1.4813, which implies that we are dealing with a minimum extension into the next major support zone between 1.4374 and 1.4228 (76.4 %/2010 low) and possibly with the resumption of the pre-2009 bear trend”.
“Another corrective leg up to 1.5056 (minor 76.4 %) and possibly to 1.5356 (int. 38.2 % on higher scale) can however not be excluded as long as key support between 1.4761 and 1.4689 (minor 76.4 %/pivot) is defended”.
“The breakout of the wider range between 1.5356 and 1.4228 is then going to determine whether we are dealing with a long-term trend reversal up or with the resumption of the pre-2009 bear trend”.
“As for EUR/GBP we see wave 3 projections at 0.6906 and at 0.6664 in focus as long as 0.7395/0.7406/09 (minor 38.2 % on 3 scales) caps the upside”.
“A decisive break above would bring the main T-junction at 0.7686 (int. 38.2 % on higher scale) into focus, whereas it would on the other hand take a decisive break below 0.7102 (minor 76.4 %) to resume the downtrend”.
Key Quotes
“The British Pound remains in a volatile and vulnerable setup into May when the election results and their implications are finally going to be unveiled”.
“Cable has in this context already broken the 2013 low at 1.4813, which implies that we are dealing with a minimum extension into the next major support zone between 1.4374 and 1.4228 (76.4 %/2010 low) and possibly with the resumption of the pre-2009 bear trend”.
“Another corrective leg up to 1.5056 (minor 76.4 %) and possibly to 1.5356 (int. 38.2 % on higher scale) can however not be excluded as long as key support between 1.4761 and 1.4689 (minor 76.4 %/pivot) is defended”.
“The breakout of the wider range between 1.5356 and 1.4228 is then going to determine whether we are dealing with a long-term trend reversal up or with the resumption of the pre-2009 bear trend”.
“As for EUR/GBP we see wave 3 projections at 0.6906 and at 0.6664 in focus as long as 0.7395/0.7406/09 (minor 38.2 % on 3 scales) caps the upside”.
“A decisive break above would bring the main T-junction at 0.7686 (int. 38.2 % on higher scale) into focus, whereas it would on the other hand take a decisive break below 0.7102 (minor 76.4 %) to resume the downtrend”.