GBPUSD: Having reversed its intraday losses off the 1.5558 low to close higher at 1.5698 on Thursday, risk is now building towards the 1.5763 level, its Feb 10'10 high as a follow through higher was seen in early trading today. Beyond there will bring the 1.5830/49 levels, its Dec 30'09/Feb 01'10 lows and then its psycho level at 1.6000 into focus. We expect those levels to reverse roles and provide resistance if tested. Also we are wary of its new corrective recovery tone as the pair continues to retain its broader medium term downtrend following its declines triggered off its 2009 high at 1.7041. Its daily RSI has turned higher supporting this view. On the other hand, to reverse its current upside strength, a break and hold below the 1.5558 level must be established with a turn below there allowing for further downside towards its 2010 low at 1.5532. Decisively invalidating the latter will resume its medium term trend and bringing further downside pressure towards its psycho level at 1.5400 followed by the 1.5276 level, its .50 Fib Ret (1.3501-1.7041 rally).

width=400