GBP/USD (daily chart) has stalled above a strong confluence of support around the key 1.6000 price region. This occurs on a bearish retracement after price was unable to close above the important 1.6300 resistance region last week. By falling to 1.6000 support and stalling just above it, price has also hit a key bullish trend support line that has been respected at least five times since its establishment at the June 2012 1.5266 low. With this key confluence of support around 1.6000, a breakdown could be seen as a major price event for the pair, with the 1.5825 area (last hit in mid-November 2012) as a further potential support level to the downside. On any subsequent bounce around the 1.6000 area support confluence, which would leave the current uptrend intact, initial upside resistance potentially resides around the 1.6150 and then 1.6300 price regions.
James Chen, CMT
Chief Technical Strategist
FX Solutions
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