GBPUSD: Threats Remain Lower, Targets The 1.6249 Level

GBPUSD - Extension of Monday weakness was seen in early trading today pushing the pair back below its broken falling channel and increasing further threats to the downside. We have highlighted in our previous analysis the risk of GBP holding below the 1.6692 level, its Oct 23'09 high. Supports now come in at its Oct 26'09 low at 1.6249 and its Oct 30'09 high at 1.6124 level with an invalidation of the latter opening up further downside pressure towards the 1.6000 level and then the 1.5706 level printed on Oct 13'09. Its daily studies have turned lower suggesting further downside weakness. However, for our downside view to be annulled, GBP will have to climb back above its key overhead resistance seen at the 1.6692 level where a decisive violation will create scope for further upside incursion towards the 1.6740 level, its Sept 11'09 high with an eventual loss of there setting the stage for a retarget of its YTD high at 1.7041. Beyond the latter will activate the resumption of its medium term uptrend on hold since Aug'09.Overall, threats remain to the downside shorter term as long as the pair continues to trade below the 1.6692 level.