GBP/USD recovery could test 1.3534 initially – Commerzbank

According to technicals, a potential recovery still remains on the cards for Cable, suggested Karen Jones, Head of FICC Technical Analysis at Commerzbank.

Key Quotes

“GBP/USD remains reluctant currently to sustain a break below 1.3000. The market is oscillating around the 20 day ma and this has neutralised the immediate outlook”.

“The intraday Elliott wave continues to suggest some scope for near term recovery. Above here we have 1.3534, the 29th June high and we remain unable to rule out a rally to 1.3638, the 38.2% retracement and potentially 1.4158, the 61.8% retracement of the recent sell off."

“The intraday Elliott wave count suggests that the market is not ready to go sub 1.30 yet, failure here is needed to trigger a slide to 1.2885/1.2750. Support at 1.2750/78.6% retracement of the move from 1985 to 2007 is regarded as the last defence for the 1.0463 1985 low”.