In light of the recent price action, Cable’s bias remains on the negative side, suggested Karen Jones, Head of FICC Technical Analysis at Commerzbank.
“GBP/USD last week was rejected by the top of a channel at 1.2710. We also saw a divergence of the daily RSI and the market has eased back to the 55 and 100 day moving averages at 1.2427/60. We will need for these to be eroded for potential to the 1.2253 the 18th January low. Our bias is negative”.
“We suspect that prices will need to go sub 1.2250 in order to alleviate immediate upside pressure. Support at 1.2250 guards the 1.1988/80 recent low”.
“Above 1.2710 would allow for further strength to the 1.2776 December high. Between here and 1.2836 lies several Fibonacci retracements and major resistance and we suspect that it will struggle here”.
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