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15 Aug 2013
Flash: Final proof on GBP/USD recovery sustainable still missing - JPMorgan
FXstreet.com (Barcelona) - GBP/USD enjoyed a strong rally this Wednesday, on the back of positive UK jobs data. The question in many trader's mind now is, will the rally be sustainable, and if so, under what technical basis?
According to Niall O'Connor, FX Strategist at JP Morgan Securities: "The latest penetration of key-resistance at 1.5504/30 (200 DMA/int. 76.4 %) in Cable has to be watched carefully as only a slight overshooting to 1.5608 (pivot) would be tolerable and supportive in terms of a straight resumption of the broader downtrend."
O'Connor thinks that while a break above 1.5608 would not constitute a game change on big scale, it would nevertheless "open the way for a re-test of weekly.-monthly triangle resistance at 1.5876 and at 1.5993", adding "That said we’d square our strategic short position above 1.5608 to re-enter against 1.5876."
On the downside, the scenario to negate an upgraded bullish picture requires a break below 1.5201/1.5182 (pivot/daily trend), O'Connor said, which then should be followed "by a confirming break below 1.4993 (minor 76.4 %) which would then give way for a proper test and most likely break below key-support at 1.4339/28 (76.4 % on big scale/pivot)" O'Connor said.
According to Niall O'Connor, FX Strategist at JP Morgan Securities: "The latest penetration of key-resistance at 1.5504/30 (200 DMA/int. 76.4 %) in Cable has to be watched carefully as only a slight overshooting to 1.5608 (pivot) would be tolerable and supportive in terms of a straight resumption of the broader downtrend."
O'Connor thinks that while a break above 1.5608 would not constitute a game change on big scale, it would nevertheless "open the way for a re-test of weekly.-monthly triangle resistance at 1.5876 and at 1.5993", adding "That said we’d square our strategic short position above 1.5608 to re-enter against 1.5876."
On the downside, the scenario to negate an upgraded bullish picture requires a break below 1.5201/1.5182 (pivot/daily trend), O'Connor said, which then should be followed "by a confirming break below 1.4993 (minor 76.4 %) which would then give way for a proper test and most likely break below key-support at 1.4339/28 (76.4 % on big scale/pivot)" O'Connor said.