GBP/USD: Near-term consolidation is not ruled out – Commerzbank

Following the recent price action, Cable could now attempt some consolidation, in opinion of Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank.

Key Quotes

“GBP/USD did not sustain the break of 1.3712 last week and has eased back. It is possible that this was a false break but for now we are regarding it merely as premature, although we also note that the RSI did not confirm the break higher and suspect that the market will consolidate. The recent close above 1.3712 on a daily chart closing basis pushes the 1.3836 February 2016 low to the fore. Longer term the

2018 peak at 1.4377 is being targeted. Currently while dips hold over 1.3520, the market is remains bid.”

“Below 1.3520 would alleviate immediate upside pressure for losses to the 1.3350 late December low, there is scope for the 1.3251 7 month uptrend. Currently, the Elliott wave count is implying a slide to 1.3400/1.3530.”