GBP/USD: Broader Bias Points Lower

GBPUSD: While GBP is undoubtedly biased to the downside in the medium term having resumed that trend the past week, the risk now is its hammer candle formation(bottom reversal signal) currently seen on the daily chart. This suggests that a corrective recovery higher could be in offing with the key upside target standing at the 1.5532 level, its Feb 08'10 low. This level is expected to reverse roles and provide resistance thus turning the pair back down again but if that level snaps, we could see further recovery build up towards the 1.5610 level, its Feb 15'10 low and then its Feb 17'10 high at 1.5814 where a cap is envisaged. Its weekly studies are bearish and pointing lower supporting this view. Alternatively, below its 2010 low at 1.5343 will annul the efficacy of the mentioned hammer and resume its broader weakness towards the 1.5276 level, its .50 Fib Ret (1.3501-1.7041 rally) ahead of its big psycho level at 1.5000.