GBP/USD (daily chart) as of March 6, 2013 has settled just above major support around the 1.5000 handle. This occurs after price dropped down to hit this target late last week. Since the downside price objective was hit, price has consolidated just above it in preparation for the next significant move. The two-month downtrend (starting at the very beginning of the year), has clearly been steep and dramatic, having broken down below multiple previous support levels. The low just below 1.5000 that was hit on Friday established a 31-month low for the pair.
Despite this extreme low and the current consolidation above key 1.5000 support, the bearish trend has shown little indication of relenting. With major resistance up around the previously broken 1.5250 level, any significant breakdown below 1.5000 would confirm a downtrend continuation with a further downside objective around the 1.4800 support level.
James Chen, CMT
Chief Technical Strategist
City Index Group
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