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GBP/USD correction higher likely – Commerzbank

Cable faces the likelihood of a squeeze higher in the near term, according to Karen Jones, Head of FICC Technical Analysis at Commerzbank.

Key Quotes

GBP/USD‘s new low has not been confirmed by the daily RSI, which makes me suspect that a near term correction higher is likely. The accelerated downtrend lies at 1.3280 and above here should trigger a corrective rebound to the 1.3460/1.3560 area. Rallies will be viewed as corrective opportunities to reinstate short positions. Below 1.3200 will trigger losses to the 1.3040 October low”.

“The March low lies at 1.3712. Rallies are expected to remain capped by the 1.3826 55 day moving average and while below here the market will remain directly offered”.

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