FXstreet.com (Barcelona) - After bouncing at 1.6415 and testing the 1.6500 level, GBP/USD has been rejected by the 1.6525 level to break the MA200 and MA55 zone between 1.6445/65 and trade close to previous lows at 1.6415 in the American session.
Currently the pair is trading around 1.6430/40, 0.75% below today's opening price action at 1.6560. On the downside support lies at 1.6400 and below at 1.6330/40 (Oct 29 lows). Immediate resistance could be located at 1.6520 and above at 1.6580 (intra-day high).
The FastBrokers Research Team comments: Technically speaking, the Cable's inability to test 10/23 highs has dragged the currency pair into a wedge pattern. Fortunately for bulls, the Cable is finding some strength above 1.65, meaning the psychological level could work in the GBP/USD's favor. Furthermore, the Cable as multiple uptrend lines to rely upon. On the other hand, there's still a medium-term downtrend at work, meaning the Cable has its work cut out for it to the topside.
Andrew Wilkinson, analyst at Interactive Brokers, affirms: This week the Bank of England completed its £175 billion asset purchase program and next week investors will look for an extension. The pound is not yet discounting that potential as negative, something investors balked at only two weeks ago. Instead sterling is holding up well to the dollar at $1.6514 on Friday after data showed strengthening consumer confidence and the first annual gain for home prices in 19 months.