GBP/USD: Conflicting signals warrant caution before positioning for a recovery – Commerzbank

GBP/USD extended its slide on Tuesday and fell to its lowest level in two weeks at 1.3605. Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, expects the cable to recover after this correction lower but, for the moment, remains on the sidelines.

GBP/USD is on the defensive

“GBP/USD continues to slide lower having recently failed at the 200-day ma at 1.3851, but it is possible that this was just an a-b-c correction lower and the market will recover, however conflicting signals keep us to the side lines.”

“Below the market we have 1.3569, the 12th October low and we may see slippage back to here. This guards the 1.3411 recent low.”

“A move above the 200 day ma should see further gains to 1.3914 (mid-September high). Resistance at 1.3914 guards the more important 1.3984/1.4018 medium-term pivot.”