GBPUSD - Prepares For Corrective Recovery

GBPUSD - Immediate outlook for GBP has turned consolidative to corrective after selling off from the 1.6456 level on Jan 17'10 to 1.5556 low on Friday. While the pair retains its broader weakness triggered off the 1.7041 level, its Aug'09 high, risk of corrective recovery was seen in early trading today following price hesitation off the 1.5532 level. On a follow through higher, we should see the pair head higher towards its Oct 13'09 low/range lows at 1.5706 where a reversal of roles is expected to push it back down again. Other resistance levels beyond there are located at the 1.5830 level, its Dec 30'09 low and its psycho level at 1.6000. On the other hand, if its vulnerability to the downside should continue, it will retarget its intraday low at 1.5532 level with a turn below there resuming its weakness towards the its psycho level at 1.5400 followed by the 1.5276 level with a break pushing the pair further lower towards its early May'09 low at 1.5057.Its weekly and monthly studies are supportive of this view as they are pointing lower. On the whole, although the pair's medium term downtrend remains intact, it faces immediate risk of consolidation to correction.

Market Analyst
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