GBP/USD expects further downside below 1.2085/38 – Commerzbank

According to Karen Jones, Head of FICC Technical Analysis at Commerzbank, Cable could face extra declines on a close below the 1.2085/38 area.

Key Quotes

“GBP/USD continues to show signs of failure at the near term downtrend at 1.2311. It has eroded recent lows from 1.2085/38, and sold off to the 61.8% Fibo at 1.1982. A close below 1.2085/38 would mean a continuation of the descent and should trigger losses to 1.1775 and then 1.1481 the recent spike low. We have a large time zone gap back to 1.2130 and his may be filled ahead of further declines”.

“Above 1.2311 resistance is found at the 55 day ma at 1.2410 - above here we are likely to see a challenge of the 1.2474 resistance line. While capped here, a negative bias will remain entrenched, this resistance is reinforced by the 100 day ma at 1.2581”.