GBPUSD: The short-term bearish reversal pattern favours further short-term weakness

Wednesday, October 30, 20130 comments

GBP/USD has broken its support at 1.6116, validating a short-term bearish reversal pattern. The break of the support at 1.6060 confirms the short-term implied downside risk at 1.5975. A resistance is given by 1.6119 (intraday high, see also the declining trendline).

In the medium-term, monitor the horizontal range defined by the support at 1.5886 and the resistance at 1.6260.

In the longer term, prices are close to the strong resistance area between 1.6302 (30 April 2012 high) and 1.6381 (see also the long term declining trendlines). Given the increasing overbought conditions, we would be medium term cautious on GBP/USD, as it has already priced in a lot of positive news. 
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