GBP/USD cautious tone prevails – Commerzbank

Karen Jones, Head of FICC Technical Analysis at Commerzbank, reiterated the pair keeps the cautious stance for the time being.

Key Quotes

“GBP/USD has rallied strongly higher within the confines of its converging range. It is recovering but we would continue to exercise extreme caution. The pattern could be either a bullish base or a negative triangle. Given the prior sell off the risks must remain on the downside and if we are correct than we should see this rally fail circa 1.3420”.

“The intraday Elliott wave continues to suggest some scope for near term recovery. Above here we have the top of the triangle pattern at 1.3420 and 1.3534, the 29th June high and we remain unable to rule out a rally to 1.3638, the 38.2% retracement and potentially 1.4158, the 61.8% retracement of the recent sell off”.