GBP/USD charted an outside day to the topside yesterday, notes Commerzbank.
“The new high has not been confirmed by the daily RSI. We cannot rule out further stabs higher but look for t he market to now struggle,” CB argues.
“Above 1.7205 will trigger a move to the 5 0% retracement at 1.7331 (of the move down from the 2007 peak). Initial support lies at 1.7061, the 20th June high,” CB projects.
“Given that we also have a Fibonacci extension coming in just above 1.7300 we favour profit taking in this vicinity and are loathe to chase this higher,” CB adds.
In line with this view, CB runs a limit order to resell GBP/USD at 1.7190 with a tight stop at 1.72o5.
