GBPUSD: Price Extension Envisaged

GBPUSD - The pair followed through lower on its nearer term declines off the 1.6875 level on Friday decisively violating its short term trendlineand taking out the 1.6514 level. This development continues to put GBPUSD under pressure with risk seen towards the 1.6260 level especially now that a bearish engulfing candle pattern(top reversal signal) was printed the past week supported by a negative RSI. This leaves a challenge on its recovery from the 1.5706-1.6875 levels targeting the 1.6260 level, its Nov 03’09 low and then its Oct 26’09 low at 1.6249. These key levels have to hold if tested to prevent the pair from declining further and targeting its bigger support standing at its Oct 30’09 high at 1.6124 level and then the 1.5706 level, its Oct 13’09 low. On the other hand, to reverse its current downside pressure, GBP must decisively break and hold above the 1.6875 level to indicate further upside incursions towards its YTD high the 1.7041 level. A break above there is required to resume its MT uptrend and aim at higher prices towards its .50 Ret (2.1160-1.3501 decline) at 1.7314 and then the 1.7630 level, its Oct 12’08 high.