GBP/USD (daily chart) has rebounded off of key 1.6000 support after hitting a high just shy of 1.6150 resistance last week and retracing back to the downside. This bullish bounce occurs after price broke out two weeks ago above the same 1.6000 level as well as a bearish resistance trend line extending back to the September 1.6300 region high. Price has just turned up at the 1.6000 level with a clear hammer candlestick pattern, which may have provided additional support for the upside rebound. Also potentially providing some measure of support confluence has been the 50-day moving average. In the event that bullish momentum continues off the rebound to breakout above the key 1.6150 level, price could move up towards a re-test of potential resistance around the important 1.6300 level, which was first established in April and re-tested in September.
James Chen, CMT
Chief Technical Strategist
FX Solutions
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