FXstreet.com (Barcelona) - Pound's rally from Nov 3.low at 1.6260 capped on Monday at 1.6800, and the pair has capped at 1.6845 to drop to levels right above 1.6500, with upside momentum losing strength, according to Karen Jones, technical analyst at Commerzbank.

The Pound is seeking support at 1.6500/20 area, according to Jones: GBP/USD has seen a divergence of the daily RSI - this implies a loss of upside momentum and a pull back to the 1.6518/00 nearby support - namely the nearby uptrend and the 20 day ma.

From current levels, Jones would not discard a re-test of 1.6845 level although the pair will likelly bere capped below 1.7040/50: It is possible that yet another recovery will be seen for a challenge of

Mondays high of 1.6844 however we suspect that the market will again top ahead of 1.7040/50 major resistance (August high and the November 2005 low).

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