Karen Jones, analyst at Commerzbank, notes that the GBP/USD pair continues to consolidate below the 23.6% retracement at 1.2753.
“We are looking for the correction higher to extend slightly further to the 38.2% retracement at 1.2873, where we suspect it will stall. It will need to regain this on a closing basis in order to alleviate immediate downside pressure and avert further losses to the 1.2444 December 2018 low. Initial support is the 1.2559 end of May low. Minor resistance lies at the 1.2772 February low ahead of the 1.2865 April low.”
“Immediate downside pressure will be maintained while no rise above the 200 day moving average at 1.2939 is seen. Next up is the May 10 high at 1.3048. Only if this level were to be exceeded, would we look for the 1.3185/97 April and current May highs to be retested.”
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