GBP/USD expected to fail around 1.2500 – Commerzbank

The ongoing upside in GBP/USD is still seen as corrective only, while it is expected to run out of legs in the 1.2500 region, suggested Karen Jones, Head of FICC Technical Analysis at Commerzbank.

Key Quotes

“GBP/USD has taken out the 5 month downtrend at 1.2341 (following the ruling that the UK government must hold a vote in Parliament before triggering article 50). The market has already virtually reached the 1.2500 psychological resistance and it is interesting to note that all the daily and intraday charts continue to indicate that this move higher is corrective only and should failure here. There is scope for a test of the 1.2798/1.2840 6 th July low and 38/2% retracement of the entire move down from June”.

“Initial support is 1.2335, the 19th October high. Recent lows remain 1.2090/83. Failure here would mean a continuation of the descent and should trigger losses to the May 1985 low at 1.1855. Our intraday Elliott counts are suggesting a decline to 1.1630”.

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