GBPUSD- The pair continues to face downside pressure selling off sharply lower to close the week at 1.6260, slightly below its Nov 27'09 low at 1.6267. Although our nearer term bias remains lower, we would like to see GBP break and hold below its longer term declining trendline to convince the market of further lower prices and a halt in its broader medium term uptrend. If this materializes, its Oct 30'09 high at 1.6124 will be aimed at ahead of its major swing low at the 1.5706 level, its Oct 13'09 low. A break below the latter will break its pattern of higher highs and lows and trigger further downside weakness towards the 1.5351 level, marking its May 10'09 high. Its weekly RSI is supportive of this view as it is bearish and trending lower. However, above its Nov 25'09 high at 1.6744 and the 1.6875 level, its Nov 16'0-09 high must be traded to reverse its current downside threats and bring gains towards the 1.7041 level, its YTD high and then its .50 Ret (2.1160-1.3501 decline) at 1.7314.
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