GBP/USD: The 1.5830-1.6000 Levels To Cap Recovery

GBPUSD: Consolidation to corrective price action dominated most of GBP’s activities the past week pushing it a higher close at 1.5697. This is coming on the back of its decline  off its 2009 high at 1.7041. While that continues to be seen, we expect its resistance zone between the 1.5830 and 1.6000 levels(Dec 30’09/psycho level) to contain corrective strength if tested. This should reverse the pair back down in line with its broader medium term downtrend. Further out, overhead resistance is located at the 1.6068 level, its Feb 03’10 high where a reversal of roles is expected. On the downside, strong support lies at its 2010 low at 1.5532 where a clean penetration will activate the resumption of its medium term downtrend towards the 1.5351 level, its May 12’09 high with a turn below there opening up further downside risk towards the 1.5276 level, its .50 Fib Ret(1.3501-1.7041 rally) ahead of its May 10’09 low at 1.5057.

Weekly Chart: GBPUSD