While GBP continues to hold below the 1.6110 level and its broken rising trendline, our bias points to the downside. The immediate risk is for the pair to weaken further towards the 1.5778 level, its July'2011 low where a break will pave the way for a move further lower towards the 1.5700 level, representing its psycho level. Its daily RSI is bearish and pointing lower supporting this view. Alternatively, on any recovery higher, GBP will target the 1.6110 level, its Aug 11'2011 low where a reversal of roles as resistance is likely to occur and turn the pair back lower. Further out, the pair will have to break and hold above the 1.6451 level and then the 1.6614 level to end its bear threats and turn risk towards the 1.6743 level, its 2011 high. All in all, GBP remains vulnerable to downside as long as it holds below the 1.6110 level.

Daily