GBP/USD scope for a correction higher near term – Commerzbank

Cable could see an squeeze higher in the short term, according to Karen Jones, Head of FICC Technical Analysis at Commerzbank.

Key Quotes

“GBP/USD is holding just above its initial support at 1.2090/85, the October 11 and 25 lows. Rebounds have so far been shallow but the outside day to the topside we saw yesterday continues to imply that we will see a correction higher very near term. Resistance is found at the 55 day ma at 1.2433 - above here we are likely to see a challenge of the 1.2495 resistance line. While capped here a negative bias will remain entrenched, this resistance is reinforced by the 100 day ma at 1.2591”.

“Failure at 1.2085 would mean a continuation of the descent and should trigger losses to 1.1775 and then 1.1481 the recent spike low. Intraday rallies are indicated towards 1.2250/65, where they should start to struggle”.