Forex | Forex | Forex: GBP/USD: Pound strength is corrective, expect to cap at 1.6439/70 - Commerzbank (04/09/2009 07:38:00)

Forex: GBP/USD: Pound strength is corrective, expect to cap at 1.6439/70 - Commerzbank

FXstreet.com (Barcelona) - The Pound has found support at 1.6110 low on its decline from August high at 1.7045, and the Pound appreciated during last two days, to reach levels around 1.6400 , but, according to Karen Jones, technical analyst at Commerzbank, this recent reaction is corrective in nature and the pair will rather continue downmove.

Jones sees the Pound's rally likely to be capped around 1.6439/70: "GBP/USD’s near term strength is viewed as corrective only and is expected to terminate at 1.6439/70 – this is the location of the 55 day ma and the 38.2% retracement of the move down from the August peak. While capped here the market will remain directly offered."

According to Jones, recent close below 1.6210 confirmed 1.7040 as interim top and sets the pair heading to levels below 1.60: "We regard the recent close below 1.6210 as significant – as it confirms the 1.7040 high as an interim top and targets 1.5985/1.5800/1.5690 enroute to 1.5275."
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