FXstreet.com (Barcelona) - The Sterling's collapse after GBP from 1.6690 has continued during the American session to test 1.6350 on a 350 pips down movement. Currently the pair is trading around 1.6335/45, 1.65% below today's opening price action.
Next support levels lie at 1.6340/60 and below there, 1.6240 (Oct 19 low) and 1.6125 (Sept 30/Oct 8 highs). On the upside, resistance levels lie at 1.6490/00 (Oct 20 high/22 low), and above here, 1.6635 (oct 21 and 22 high).
On the downside, the pair could dip to 1.6320, approaching neckline for the head and shoulders, says Peter Rosentreich, technical analyst at ACM - Advanced Currency Markets: The pair looks to be targeting next downside level at 1.6320. The neckline of our head and shoulders lies at 1.5800, but before there expect support to come in at 1.6221, 1.6127 1.6750.
Valeria Bednarik, FXstreet.com collaborator, comments: Gbp fall has halted, yet pair consolidating around lows, suggest the upside will remain limited during next trading hours. Indicators had already corrected the oversold state in the hourly, while 20 SMA has turned quite bearish both in 1 and 4 hours charts, suggesting more downside to come. Under today's low, watch the key 1.6340 area as a break could accelerate selling momentum. Only above 1.6440 pair could reverse current bearish bias.
Bednarik provides us with her levels: Support levels: 1.6340 1.6300 1.6250. Resistance levels: 1.6410 1.6440 1.6485.