GBP/USD: Deeper retracement - Commerzbank

Karen Jones, analyst at Commerzbank, suggests that the GBP/USD pair is starting to erode the 200 day ma and the daily Elliott wave count is suggesting a deeper retracement to 1.2940.

Key Quotes

“Extreme caution is warranted as we note the daily RSI is breaking lower and this does reflect a loss of upside momentum. Below 1.2940 would allow for slippage to 1.2802 the 55 day ma and potentially 1.2669/62, the August low. Please note that the intraday Elliott wave counts remain positive and for now we will stand aside.”

“Overhead lies the 55 week ma at 1.3280. Here we also find the July, September and October highs at 1.3258/1.3363. We suspect that this will hold and provoke failure. Above here would target the June high at 1.3473 and the 200 week ma at 1.3641 (not favoured).”