July 09, 2013 – GBP/USD (daily chart) has dropped to retest the March 1.4830 low, establishing almost a 4-month low in the process. This retest of key support places the currency pair at a critical juncture. The current bias is towards a continuation of the steep bearish leg that has been in place since the mid-June high at 1.5750, which was also the 61.8% Fibonacci retracement of the downtrend run from the beginning of the year above 1.6300 down to the noted March 1.4830 low. Since making that mid-June 1.5750 high, price has swiftly broken down below successive prior support levels, including 1.5600, 1.5400, 1.5250, and most recently, the key 1.5000 figure. After the breakdown below 1.5000 late last week, the pair has continued its sharp bearish trend to hit today’s support low. A potential impending breakdown below 1.4800 would confirm a downtrend continuation with a further downside target around the 1.4500 support area.
James Chen, CMT
Chief Technical Strategist
City Index Group
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