GBP/USD (daily chart) as of February 12, 2013 has dropped further to reach its downside target at 1.5600. This occurs within a strong bearish trend that has been in place since price failed to breach the key 1.6300 resistance level to the upside at the very beginning of the year. The trend change to the downside was reinforced in mid-January when price broke down below both the key 1.6000 level and an exceptionally strong bullish trend line extending back to the June 2012 low at 1.5266.
The past two weeks have seen somewhat of a choppy consolidation, but with a continued bearish trend bias targeting 1.5600 support to the downside. Now that this level has been reached and slightly breached, the bearish trend appears poised to continue with further downside price objectives around key support levels including 1.5400 and then the 1.5250 area. Strong upside resistance in the event of a further bullish correction now resides around the 1.5750 level.
James Chen, CMT
Chief Technical Strategist
City Index Group
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