GBP/USD Technical Analysis October 12, 2011

The GBP/USD pair had a fairly quiet day as the markets were largely in rest mode for the Tuesday session. The pair has bounced as high as 1.57, but the area proved to be overly resistive to the advance of bulls for the session. The pair is most certainly in a downtrend lately, but the market isn’t moving in a quick enough manner to cause alarm at this point.

The Bank of England is most certainly now embarking on a new round of quantitative easing, and as such, the Pound should continue to fall. Add to that the idea of a “risk off” environment overall, this pair will continue to have a negative bias. The global risk appetite weighs heavily on this pair, so the downward movement shouldn’t be much of a surprise, especially considering how exposed the UK is to the problems in the EU.

The pair looks to be supported at the 1.53 mark, and this area will have to be broken to the downside in order to continue the run to the downside. The pair looks bearish overall, and we are selling rallies, such as the one we saw yesterday. As long as the 1.57 level holds as resistance, we cannot buy this pair at all.

Written by FX Empire