FXstreet.com (Barcelona) - Pound's pullback from yesterday's high at 1.6460 has extended during European session more than 200 pips lower, to day low at 1.6250 so far, with the pair approaching key support at 1.6235/40 area (Dec 31/Jan 4 high).

Rejection candle against 1.6409 yesterday has increased selling pressure, according to Mohammed Isah, technical analyst at FXTechstrategy: With a rejection candle printed against an important resistance level at the 1.6409 level, risk of further downside pressure is likely towards the 1.6234/39 levels, its Dec 31'09/Jan 04'10 highs where we envisage a cap due to its significance. If that level snaps, we will expect further downside towards its daily 200 ema at 1.6196.

On the upside, only a break above 1.6409 would open up for upside risk, says Isah: However, above the 1.6409 level will have to be traded to open up further upside risk towards its Nov 25'09 high at 1.6744 and then the 1.6875 level, its Nov 16'0-09 high.