GBP/USD: technically bearish at lowest levels for decades

GBP/USD is extending the downside in a sell-off today on renewed concerns over Brexit this week and volatility kicked in with the news that the ECB could possibly start tapering their QE.

GBP/USD has been better offered since losing the 1.30 handle at the end of September and the break below 1.2950 to 1.2845 was a straight run that led to another strong sell-off to 1.2740 this week, breaking the 1.2797/50 July lows and the long term Fibonacci support, leading to the lowest levels scored in cable for decades.

GBP/USD levels, bearish bias

"A close below here will be regarded as very negative and target circa 1.22," according to analysts at Commerzbank. "We have a near term resistance line at 1.3002 (nearby high is 1.3056) and will consider that the market remains directly offered below here. We view the September high at 1.3443 as an interim high. Only if it and the late June high at 1.3534 were to be overcome would we neutralize our medium term negative outlook."