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GBP/USD is bouncing from the 200-day ma at 1.2717 and was last seen trading at 1.2847, up 0.1% on the day. Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, notes that the cable has room to rise to 1.3070, but a failure here would allow for further losses to the 1.2250 area.

Key quotes

“GBP/USD saw a decent recovery yesterday from the 200-day ma at 1.2717, but the rally has yet to overcome any resistance of note.”

“Caution is warranted as intraday Elliott wave counts are positive and we have opted to cover our short positions for now.”

“Initial resistance lies at 1.3008 the mid-September high and we would allow for 1.3070. Ahead of here lies the 20-day ma at 1.2936. Should the market fail 1.3000/70, we would allow for further losses to 1.2445 and then 1.2250/00.”

“The 1.3070 level guards the 1.3201 March high and the recent high at 1.3483 and the 1.3522 downtrend.”