GBPUSD: Builds On Recovery Strength

GBPUSD - Although GBP is now strengthening on the back of its Tuesday intra day recovery, we would like to see the pair break back above its invalidated ST rising trendline and target the 1.6875 level. This development if seen should create scope for a move higher towards its YTD high standing at 1.7041 with a breach triggering its medium term resumption and pushing it further towards its .50 Ret (2.1160-1.3501 decline) at 1.7314 ahead of the 1.7630 level, its Oct 12'08 high. Support starts at the 1.6459 level where its Nov 20'09 high is located. Further down, the 1.6249/60 area, its Oct 26'09/Nov 03'09 lows comes in as the next support. These two key levels must hold if tested to prevent the pair from declining further and targeting its big support standing at its Oct 30'09 high at 1.6124 level ahead of the 1.5706 level, its Oct 13'09 low. On the whole, though GBP is recovering higher, a break and hold above the 1.6875 level is required to reverse its current downside pressure.

Daily Chart: GBPUSD