In Cable, Commerzbank notes that it eased lower towards the end of the week and while this alleviates immediate upside pressure we will need a close below the uptrend channel at 1.6771 to confirm that the market has topped.
Can we overcome 1.7000? CB doesn’t think so. However, according to Commerzbank, signals are conflicting.
“Longer term failure circa 1.7000 makes us believe that a major top is in the process of being formed. Below support at 1.6732 (mid May low) lie the 1.6683/72 late March high and the mid-April low and then 1.6794 the 23.6% retracement if the 2013-2014 move,” Commerzbank notes.
“We have resistance at 1.6901 and 1.6937 and this is seen as the last defence for 1.7000,” Commerzbank adds.
In line with this view, Commerzbank runs a limit order to sell GBP/USD at 1.69, with a stop at 1.7050.
