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19 Jun 2013
Flash: Major fall in GBP/USD projected, as cheap as 1.3266 - JPMorgan
FXstreet.com (Barcelona) - The odds remain very much in favor of a major decline in GBP/USD, based on the down-breakout of a multiyear triangle in February, says Thomas Anthonj, FX Strategist at JPMorgan.
If the assumption from Anthonj is fullfiled, "we'd have to classify the 1.6379 to 1.4823 decline as wave 1 down so that the
recovery since would classically form a zigzag countertrend rally (wave 2) which is already clearly visible" the Strategist notes.
Given the negative implications from the triangle breakout, Anthonj, in his own words, "would be very surprised if the market would find the inner strength to exceed 1.5784/88 (C = A/61.8 %) which would be the only way to delay acceleration lower in favor of an extension up to the highest T-junction at 1.6014 (65.4 %)."
Anthonj is looking for a break below 1.5498/88 (minor 38.2 %/pivot) to indicate "the countertrend rally top (wave 2) is in place, receiving its final confirmations via breaks below 1.5181 (minor 76.4 %) and below 1.5046 (daily trend)" the Strategist added.
Lastly, if the latter scenario is accomplished, it would free the way towards 1.4339/1.4228 (76.4 % on big scale/pivot), "before the 2009 low at 1.3504 and the projected wave 3 target at 1.3266 would come into focus" Anthinj concludes.
If the assumption from Anthonj is fullfiled, "we'd have to classify the 1.6379 to 1.4823 decline as wave 1 down so that the
recovery since would classically form a zigzag countertrend rally (wave 2) which is already clearly visible" the Strategist notes.
Given the negative implications from the triangle breakout, Anthonj, in his own words, "would be very surprised if the market would find the inner strength to exceed 1.5784/88 (C = A/61.8 %) which would be the only way to delay acceleration lower in favor of an extension up to the highest T-junction at 1.6014 (65.4 %)."
Anthonj is looking for a break below 1.5498/88 (minor 38.2 %/pivot) to indicate "the countertrend rally top (wave 2) is in place, receiving its final confirmations via breaks below 1.5181 (minor 76.4 %) and below 1.5046 (daily trend)" the Strategist added.
Lastly, if the latter scenario is accomplished, it would free the way towards 1.4339/1.4228 (76.4 % on big scale/pivot), "before the 2009 low at 1.3504 and the projected wave 3 target at 1.3266 would come into focus" Anthinj concludes.