GBP/USD: Wave counts suggest setbacks could be severe - JPMorgan


FXStreet (Bali) - According to Paul Meggyesi and Thomas Anthonj, FX Strategists at JPMorgan, GBP/USD is running an increased risk of severe setbacks.

Key Quotes

"The bullish implications from the triangle breakout last November have finally materialized but having already come close to key-pivotal resistance at 1.7044/49 (2009 high/2005 low) the market is running an increased setback risk. Only a break above 1.7049 would open fresh upside potential to 1.7332 (50 %/monthly Ichimoku-lagging) and possibly to 1.7768 (C = A)."

"Looking at the chart picture and given the shown wave counts it becomes obvious though that setbacks could be severe, offering minimum down- potential to 1.6274/18 (minor 38.2 %/weekly breakout line) with the option to extend to 1.5329 (int. 76.4 %) in case 1.6218 fails to provide support."

"In the short-run, we are now focusing on a range breakout between 1.7044/49 (pivots) and 1.6829 (Minor 38.2 %) to receive an early indication whether the broader up-trend is going to be prolonged or whether the risk of running into a deeper setback is increasing. The latter would receive additional evidence via a break below daily trend line support at 1.6674."

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