GBP/USD could attempt a rally above 1.2600 – Commerzbank

In view of the unexpected price action in Cable today, Karen Jones, Head of FICC Technical Analysis Research at Commerzbank, suggested a test of levels above the 1.2600 handle seems likely today.

Key Quotes

“GBP/USD has seen a massive spike lower overnight to reach the 1.1938 level. The 1.2200 target has clearly been met. Needless to say this move is overdone and we would allow for a retracement. We have a time zone gap back to 1.12639 (this is the gap between where London left the market and we find ourselves this morning). We would allow for this to be partially filled and note the Elliott wave count is suggesting a rally to 1.2625 intraday”.

“We have a near term resistance line at 1.2937 (nearby high is 1.3056) and will consider that the market remains directly offered below here. Below 1.1938 we target the 1.0463 1985 low”.