Sunday, January 22nd, 2012: GBP/USD found support at 1.5273 which was 6 pips below the support mentioned by us during the last weekend and quoted above. The GBPUSD pair took a strong upward move from there and touched 1.5578 and closed strongly for the week at 1.5575.
The price action of the last week indicates that we should see some more upward move if the resistance near 1.5630 gets broken. Even above 1.5620 we would expect frequent resistances near 1.5670 and 1.5700. A break over 1.5700 should bring further upward move towards strong resistance near 1.5780. Above 1.5700 our short-term outlook will become more neutral but we will expect convincing short-term reversal of the short-term downtrend only with a break over 1.5785.
Please note that every subsequent low of GBPUSD has been getting lower and also every subsequent high is also getting lower. This plus the overall price action combined with the overall bearish outlook from Euro region (EURUSD and GBPUSD are strongly correlated), keeps out mid-term outlook bearish.
On the downside, another strong break below 1.5400 should take GBPUSD to retest the recent 1.5279 and then 1.5233. A firm break below this and the minor support of 1.5220 should take the GBPUSD towards 1.5160. The psychological support of the approaching 1.5000 ranges should gain strength from this level.
You may also check daily technical analysis of gbp/usd and the weekend gbpusd forecast at ForexAbode.com.
