May 7, 2013 – GBP/USD (daily chart) has stalled just below key resistance around both the 1.5600 level and the 50% Fibonacci retracement of the steep plunge from the beginning of the year to mid-March. This confluence of resistance has been a strong barrier over the past week to the pair’s further advance after its sharp rise in late April. From a trend perspective, price is currently entrenched within a clear uptrend from the 1.4830 mid-March low, which represents a bullish correction of the noted downtrend from the beginning of the year to mid-March.
Major downside support within this bullish correction currently resides around the key 1.5400 level. If price is able to muster the strength to break out above the resistance imposed by the 1.5600 level and the noted 50% retracement level, the next major price objectives to the upside reside around 1.5750 and then 1.5825.
James Chen, CMT
Chief Technical Strategist
City Index Group
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