GBP/USD could bounce to 1.3500/1.3730 – Commerzbank

According to Karen Jones, Head of FICC Technical Analysis at Commerzbank, technicals could be suggesting the possibility of a squeeze higher towards the 1.3500/1.3730 band.

Key Quotes

“GBP/USD has continued to fall and is heading to the 1992- 2016 support line at 1.2972/65 (this connects all the lows from 1992- 2016). Below here lies the 1.2750/78.6% retracement of the move from 1985 to 2007, which is the last defense for the 1.0463 1985 low”.

“After such a strong down move it would be ‘normal’ to see a period of consolidation, and currently the intraday Elliott wave counts are implying a return to 1.3500/1.3730”.

“Rallies will find previous lows at 1.3837 (Feb low) and the 1.4005/15 (April and June low) will offer strong resistance. A downside bias will remain fully entrenched while below the 1.4080/50% retracement”.