Forex: GBP/USD bounces at 1.5985 and trades back above 1.6050

 @ibtimes
on January 05 2010 7:53 AM

FXstreet.com (Barcelona) - The Sterling has found support against the Greenback after falling around 150 pips from 1.6150 in the early European morning to reach 1.5985 in the last hour. GBP/USD has bounced at this level and it has begun to rise back to trade above 1.6050 level. Currently the pair is moving around 1.6035/45, 0.35% below today's opening price action at 1.6080.

TJ Marta, Chief Market Strategist at Marta on the Markets, comments: Cable (1.6007) is down overnight after trading to a new high since mid-December yesterday. It remains within the 1.60-1.68 range that has held for most of the time since June. Technical support lies at 1.5833 (Dec30 low) and then 1.5708 (Oct low). Resistance lies at 1.6241 (Jan4 high), 1.6411 (Dec 16 high), 1.6878 (Nov16 high) and 1.7043 (Aug high). The strongest correlates over the past two months for GBP/USD have been the DXY (negative), EUR/USD (positive), the S&P (positive) and crude oil (positive).

The Kshitij Consultancy Service Team affirms: Cable has fallen sharply during the day. It is likely to fall further towards 1.5850 over the next couple of days. The 200-DMA having been breached, the pair may come down after some sideways movement towards the 55-week MA (1.5659). The sideways range that we are looking at is a broad 1.5850-1.6250. Once this range is broken, a fall towards the 55-week MA looks very likely. Once there, we might have to study for an even further fall on a confirmation of the double top formation on the weekly charts.

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