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In opinion of Karen Jones, Head of FICC Technical Analysis at Commerzbank, there is scope for a potential squeeze higher in Cable ahead of further losses than could reach 1.2590.

Key Quotes

GBP/USD is correcting higher very near term, we note the 13 count on the daily chart and would allow for a small corrective rebound ahead of further losses to the June 2017 low at 1.2590. Minor resistance above the 1.2922 20 day ma comes in at the 1.2957 July low. We have a 4 month resistance line at 1.2913 and look for the market to struggle here”.

“The intraday Elliott wave counts are conflicting, above 1.2957 would allow for a challenge of the 1.3173 July 30 high. Minor resistance below this level comes in at the 1.2957 July 19 low as well as at the 1.3049 and 1.3102 late June lows”.