GBP/USD could slip back to the 1.2960/10 band – Commerzbank

Cable faces a potential drop to the 1.2960/10 band ahead of a probable leg higher, suggested Karen Jones, Head of FICC Technical Analysis at Commerzbank.

Key Quotes

“GBP/USD has rallied to and is consolidating at the 55 day ma at 1.3053. We look for this to hold the initial test. The intraday Elliott wave counts are implying a move to 1.2960/10 ahead of another leg higher. It increasingly looks to have based. We would then allow for a challenge of the 1.3173 July 30 high and the 1.3363 9 th July high. Minor resistance below this level comes in at the 1.3102 late June lows. A move above the 1.3363 July high would imply a deeper corrective phase to the 1.3473/1.3547 June high and 200 day moving average”.

“Intraday the cross stays bid above 1.2795. Below 1.2795 will imply a retest of the 1.2662 August low”.