GBPUSD: Breaks And Holds Above The 1.6409 Level

GBPUSD: Further momentum build up saw GBP testing a high of 1.6456 as the time of this analysis today suggesting that a break and close above its key resistance at its Dec 16’09 high at 1.6409 is now shaping up. We are expecting two scenarios at this stage with the first one being a back off on initial test of that level and the second being a clean break of the 1.6409 level. The latter is now occuring but to qualify as a valid break, we want to see a higher close above there on a daily basis. Beyond the 1.6409 level will create further strength towards its Nov 25’09 high at 1.6744 and then the 1.6875 level, its Nov 16’0-09 high. The bigger level lies at the 1.7041 level, its 2009 high which doubles as its broader consolidation range top. On the hand, if a challenge on the 1.6409 level fails to follow through higher, lower prices should be expected towards its minor support at the 1.6354 level printed on Jan 15’10. Invalidating that level will mean additional downside pressure towards its strong support at the 1.6234/39 levels, its Dec 31’09/Jan 04’10 highs where a cap is envisaged. Further down, supports are located at its daily 200 ema at 1.6196 and its Jan 07’10 low at 1.6056 and next the 1.5830 level, its Dec 30’09. The latter level is the trigger for the resumption of its declines activated off the 1.6875 level towards the 1.5706 level, its Oct 13’09 low with a clearance of that level seeing a 100% price retracement (from 1.5706- 1.6875 levels) and opening the door for additional downside towards its .50 Ret (1.3501-1.7041 rally) at 1.5273.

Mohammed Isah
Market Analyst
www.fxtechstrategy.com

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