Karen Jones, Head of FICC Technical Analysis at Commerzbank sees scope for a small rebound courtesy of current intraday Elliott wave count.
GBP/USD has again eased back to its 20-day ma at 1.3347, which it is starting to erode. There remains an upside bias above last weeks low at 1.3320, current intraday Elliott wave counts imply that we should see a small rebound. It has recently broken above the 2014-2017 downtrend and this has introduced scope to the 1.3658/71 September high and double Fibonacci retracement. Below 1.3320 should be enough to alleviate immediate upside pressure and allow for weakness back to the 1.3157 2016-2017 uptrend.
Where are we wrong? The 1.3157 2014-17 uptrend represents the breakdown point to 1.2830/1.2774, the 38.2% retracement and August low, and the 1.2575 50% retracement.
Short-Term Trend (1-3 weeks): The 2014-2017 downtrend line has been eroded to target the 1.3658/71 double Fibo.
Long-term trend (1-3 months): A close below the 1.3157 uptrend will be viewed very negatively.