GBPUSD: Further momentum build up saw GBP testing a high of 1.6419 as the time of this analysis today suggesting that recapturing its key resistance at its Dec 16'09 high at 1.6409 could be shaping up. We are envisaging two scenarios at this stage with the first one being a back off on initial test of that level and the second being a clean break of the 1.6409 level. If the latter occurs, further strength could develop towards its Nov 25'09 high at 1.6744 and then the 1.6875 level, its Nov 16'0-09 high. The bigger level lies at the 1.7041 level, its 2009 high which doubles as its broader consolidation range top. On the hand, if a challenge on the 1.6409 level fails to follow through higher, lower prices should be expected towards its minor support at the 1.6354 level printed on Jan 15'10. Invalidating that level will mean additional downside pressure towards its strong support at the 1.6234/39 levels, its Dec 31'09/Jan 04'10 highs where a cap is envisaged. Further down, supports are located at its daily 200 emaat 1.6196 and its Jan 07'10 low at 1.6056 and next the 1.5830 level, its Dec 30'09. The latter level is the trigger for the resumption of its declines activated off the 1.6875 level towards the 1.5706 level, its Oct 13'09 low with a clearance of that level seeing a 100% price retracement (from 1.5706-1.6875 levels) and opening the door for additional downside towards its .50 Ret (1.3501-1.7041 rally) at 1.5273.

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