GBPUSD:   Turns Higher Off Hammer Low.

GBP halted its declines triggered off the 1.6740 high on Sept 11'09 on Monday printing a hammer candle and following through higher in early trading today. With the hammer confirmation triggered, risk now remains for corrective upmove towards its broken trendline back at 1.6408 where a cap is expected to turn the pair lower again. If this fails, higher prices could develop towards the 1.6742 level, its July 30'09 high and possibly higher targeting its YTD high at 1.7041. Its daily RSI which has turned higher remains supportive of this view. Conversely, reversing its current recovery will clear the way for declines towards its Monday low at 1.6132 followed by the 1.6112 level, its Sept 02'09 low where a ceiling is expected. Below there if seen will target the 1.5982 level, which marks its July 08'09  and then the 1.5742 level, its July 30'09 high. On the whole, though currently challenging higher prices, as long as the pair holds below its broken MT rising trendline, risk remains lower.

Support       Comments

1.6132         Sept 21'09 low

1.6112          Sept 01'09 low

1.6034/00     July 13'09 low/psycho level

Resistance   Comments

1.6350          MT trendline

1.6401          Sept 15'09 low

1.6740          July 30'09 high

Daily Chart: GBPUSD