GBP/USD neutral above 1.2510 – Commerzbank

Cable’s stance should shift to neutral from negative while below 1.2510, suggested Karen Jones, Head of FICC Technical Analysis at Commerzbank.

Key Quotes

“Sterling recently eroded the 55 and 100 day moving averages, but has not sustained the break lower. We note the 13 count on the 60 minute chart and would allow for a very near term rebound ahead of further losses but this ideally has to remain below 1.2510 in order to maintain a negative bias, above will neutralise the chart. Key short term resistance is the channel at 1.2627 and the 200 day ma at 1.2632. Below 1.2347 (Feb low) would cast attention back to the 1.2110 recent low. This is considered to be the last defence for the 1.1988 January low”.

“Key near term resistance is the top of the channel at 1.2627. Only above the 1.2707 February high would allow for further strength to the 1.2776 December high to be seen. Between it and 1.2836 lie several Fibonacci retracements and major resistance and we suspect that it will fail there”.