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Karen Jones, analyst at Commerzbank, explains that GBP/USD slide into 35 month lows was accompanied by a large divergence of the daily RSI and it also has not closed below 1.2000 and we may see some very near term consolidation.

Key Quotes

“Below 1.1958 (yesterday’s low) lies the 1.1491 3 rd October low (according to CQG). It remains on the defensive below the 55 day ma at 1.2348 – this protects the June high at 1.2784.”

“Only a rise above the June high at 1.2784 would indicate that a bottom is being formed (not favoured).”