GBPUSD: Weak bounce thus far

Tuesday, October 15, 20130 comments

GBP/USD has bounced near the support implied by the rising trend line. However, the rebound has thus far been unimpressive, indicating a weak buying interest. Monitor the support area between 1.5914 (10 October 2013 low) and 1.5886 (17 September 2013 low). Resistances can be found at 1.6018 (14 October 2013 high) and 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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