GBP/USD set to rebound towards the 20-DMA at 1.3274 - Commerzbank

Dhwani Mehta FXStreet

In the view of Karen Jones, Analysts at Commerzbank, argues that the divergence of the daily RSI implies a loss of downside momentum and hence a corrective rebound towards 1.3274 cannot be ruled out in GBP/USD.

Key Quotes:

“GBP/USD last week charted a new low at 1.3049, which has been accompanied by a divergence of the RSI. The market appears to have reversed just ahead of strong support offered by the 1.3040 October 2017 low. The divergence of the daily RSI implies a loss of downside momentum and we would allow for a corrective rebound near term towards the 20-day ma at 1.3274 and possibly the 1.3400/10 area. Should a recovery above the 20-day ma at 1.3274 be seen, this would allow for a corrective rebound into the 1.3440/1.3540 band and there is scope for the 1.3591 200 day ma (although this is less favored..

Below 1.3040 would target the 50% retracement at 1.2918. Below 1.2918 would be treated as the breakdown point to 1.2580, the 61.8% retracement from 2016.”

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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