GBP/USD is continuing to decline inside the Down Channel chart pattern identified by Autochartist on the daily charts. The overall Quality of this chart pattern is measured at the 4 bar level as a result of the low Initial Trend (rated at one bar level), average Uniformity (5 bars) and higher Clarity (6 bars). The top of this Down Channel (point A on the chart below) formed when the price reversed down sharply from the strong resistance at 1.6700, which the pair had failed to penetrate multiple times before - during the second half of 2009, as is shown on the second chart below. The first connecting point of the lower support trendline of this chart pattern (point C) formed when the price corrected up from the support at the round price level 1.6000.
The bottom of this chart pattern (point D) formed at the combined support made out of the cluster of the Fibonacci Retracements of the previous upward price impulses - 61,8% Fibonacci Correction of the immediately preceding upward daily impulse as well as the 38,2% Fibonacci Correction of the longer-term upward impulse seen on the weekly charts. The price has recently reversed down (at point B) from the combined resistance made out of round price level 1.6500 and the previous long-term support trendline (drawn under the aforementioned preceding weekly upward impulse), which was broken by the first downward impulse of this chart pattern (from A to D) and is acting as the resistance now. The pair is expected to continue to fall in the direction of the lower support trendline of this chart pattern in the coming sessions.
The following weekly GBP/USD chart demonstrates the aforementioned technical price levels affecting the pair now:
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