Karen Jones, analyst at Commerzbank, points out that the GBP/USD pair is correcting higher very near term after last week saw a slight erosion of the 2016-2019 uptrend line at 1.2615 and view this as a false break.
“We note the 13 count and TD support at 1.2521 and also that the daily RSI has not confirmed the new low. It will need to regain the 20 day ma at 1.2747 as an absolute minimum in order to alleviate immediate downside pressure and avert further losses to the 1.2444 December 2018 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 1.2948 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.”