Merrill Lynch says GBP/USD head and shoulders figure means we can target 1.08

Merrill Lynch identifies a sizeable head and shoulders formation:

"If the month of June, and therefore Q2, ends below 1.4153, this will be a close below the quarterly Q2 closing of 2001 and the lowest quarterly close since 1985. A close below 1.40 would be devastating - technically speaking - for the next 10 years.

1.40 is the neck line of a downward head and shoulders formation, and if we follow the rulebook, the target would then be 1.2781 and 1.24, followed by 1.2027 and then 1.08," says Merrill Lynch.