GBPUSD: With GBP weakening for second month in a row (Dec'09 & Jan'10) since tumbling off the 1.6875 level , Dec 16'09 high, our broader bias remains lower as the pair continues to battle it out within its sideways consolidation range. It was down -1.05% for the month of Jan'10. As another week of downside losses was seen the past week driving the pair below the 1.6000 levels, threats of a follow-through lower towards the 1.5830 level, its Dec 30'09 low as a new month begins is now envisaged with a sustained break below there resuming its declines initiated from the 1.6875 level in Mid Nov'09 and setting the stage for further weakness towards the 1.5706 level, its Oct 13'09 low/range low. Further price acceleration through the latter will see a 100% price retracement of its move from 1.5706- 1.6875 and open the door for additional pressure towards its .50 fibonacci retracement (1.3501-1.7041 rally) at 1.5273 and then the 1.4751 level, its May'09 low. Its weekly RSI remains bearish and pointing lower suggesting further weakness. On the contrary, we will have to see a firm break and hold above the 1.6875 level to reverse our downside bias on the pair. In such a case, its 2009 high standing at 1.7041 will be targeted with a loss of there resuming its medium term uptrend now on hold towards the 1.7356 level, its weekly 200 ema. On the whole, with two months of weakness now seen and downside price momentum still intact, we think GBP should weak further towards its range low at 1.5706 level and beyond.

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