GBP/USD: Meltdown; EUR/USD: Another Leg Down - BofA Merrill
GBP/USD has broken significant, long term support, notes Bank of America Merrill Lynch.
"The push through 1.4862/1.4813 (78.6% of the 2010/2014 advance & Jul’13 low) points to continued medium term weakness for the May’10 low at 1.4228 ahead of LONG TERM, multi-decade range lows at 1.4035/1.3504," BofA projects.
"Interim support lies at 1.4653 (6m channel base), but this should provide only temporary relief," BofA adds.
"Bounces should be limited to 1.4813/1.4862," BofA projects.
Moreover, BofA argues that as EUR/GBP has rallied impulsively over the past 3 days, it's a strong sign that its trend is turning higher and that GBP should begin to underperform the EUR on a consistent basis going forward.
Finally BofA remains bearish on EUR/USD anticipating another leg down to add to its ongoing aggressive sell-off.
"We remain bearish for 1.0283 and potentially below," BofA advises.
