GBP/USD (daily chart) has descended to approach strong support around the 1.6000 price area on a bearish correction after the pair was unable to close above the key 1.6300 resistance region on Wednesday. By reaching down to 1.6000 support around the U.S. employment report, price has also approached a bullish support trend line that has been respected at least 5 times since the trend line was established at the June 2012 1.5266 low. Additionally, the 100-day moving average is currently just above this 1.6000 area. With this strong support confluence, 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 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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