GBPUSD: W eak bounce thus far

Monday, October 14, 20131comments

GBP/USD has bounced near the support implied by the rising trend line. However, the inability to move above its previous support at 1.6006 (see also the declining channel) indicates a weak buying interest. Monitor the support area between 1.5914 (10 October 2013 low) and 1.5886. Another resistance can be found at 1.6124 (08 October 2013 high).

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 trend lines). 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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