Having closed lower the past week, GBP remains vulnerable to the downside as we enter 2012 suggesting a follow through lower on the back its medium term weakness could play out. This is coming on the back of its Nov and Dec'2011 weakness and if a continuation of that decline is seen, the 1.5270 level, its Oct 2011 low will be targeted with a break of here extending further bear pressure towards its big psycho level at 1.5000. Price hesitation could be seen here with the risk of a correction but if this fails to materialize, further declines could shape up towards the 1.4871 level. Its weekly RSI is bearish and pointing lower supporting this view. Alternatively, GBP will have to break and hold above the 1.5770 level, its Dec 21'2011 high to halt its bear threats and open the door for further recovery higher towards the 1.5885 level, its Nov 18'2011 high. A breach will aim at the 1.6161 level, its Oct 31'2011 high. On the whole, GBP's downside vulnerability remains intact with the risk of further downside pressure probable.

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