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In view of Karen Jones, Head of FICC Technical Analysis at Commerzbank, occasional rallies in Cable should be considered as corrective.

Key Quotes

GBP/USD has sold off to 1.3302/20, the mid-December low. Given the 13 count and the oversold RSI it is possible that this will hold the initial test. However rallies will be viewed as corrective opportunities to reinstate short positions. Below 1.3300 will trigger losses to the 1.3040 October low”.

“Currently intraday Elliott wave counts are pointing to a 1.3535/1.3615 move. The March low lies at 1.3712. Rallies are expected to remain capped by the 1.3872 55 day moving average and while below here the market will remain directly offered”.