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”.