GBPUSD: Sideways Range Break Out Highlights Prospect For The 1.5276 Level

GBPUSD: Having finally pushed through its Oct 13’09 low/range lows at 1.5706 the past week, we are now looking for further downside weakness towards its major support at the 1.5276 level, its .50 Fib Ret(1.3501-1.7041 rally). Before here lies a minor support at the 1.5351 level, its May 12’09 high. With two attempts to resume its medium term uptrend failing in Aug’09 and Nov’09, the pair collapsed to a low of 1.5830 in late Dec’09 before backing off to recover to a high of 1.6456 on Jan 19’10. That recovery subsequently faded and GBP turned lower again culminating in the break of the 1.5706 level on Friday which has resumed its short term weakness. Risk as highlighted above points towards the 1.5276 level with a break pushing the pair further lower towards its early May’09 low at 1.5057 and then its .618 Fib Ret(1.3601-1.7041 rally) at 1.4858. Its pattern break out target resides at the 1.4371 level established by measuring the width of the range and projecting it from the breakout point. Its weekly RSI is bearish and pointing lower suggesting further weakness. On the other hand, on any recovery from its present price levels, its eroded support at the 1.5706 level is expected to reverse roles and provide resistance. Further out, its Dec 30’09 low at 1.5830 level and the 1.6068 level, its Feb 03’10 high are see as the next upside objectives.

Mohammed Isah
Market Analyst
www.fxtechstrategy.com

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