GBP/USD 1.6237 – 21 January 2010

GBP/USD Open 1.6299 High 1.6392 Low 1.6200 Close 1.6290
Pound/Dollar lost all its gains from the first 2 days of the week, dropping from the 1.6438 top on the 15 minute chart. On Wednesday the descending movement continued to 1.6255, closing the day at 1.6290. After little resistance this morning, the Cable continued weakening, as expected by us. Break bellow the key 1.6200 support level would confirm the strong bearish momentum, and may strengthen the Dollar further towards 1.6198. As quotes are holding bellow the 20 and 50 EMA, the depreciating impulse is expected to continue in the short term. The nearest resistance is 1.6311, followed by yesterday’s top at 1.6392. The M4 money supply, CBI industrial order and PSNB December economic data at 9:30 GMT may bring further volatility to today’s movements. RSI, MACD and CCI oscillators are all negative and signal for possible stronger decrease of the Sterling, but any market fluctuations should not come unexpected.
Technical resistance levels: 1.6311 1.6392 1.6500
Technical support levels: 1.6200 1.6198 1.6085

Trading range: 1.6250 – 1.6175
Trend: Downward
Sell at 1.6237 SL 1.6267 TP 1.6187

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