July 17, 2013 – GBP/USD (daily chart) has tentatively backed off and retreated from key resistance around the 1.5250 price region after rising just above this level in early Wednesday trading. This rise to resistance occurs after price bounced off a double bottom low last week around the 1.4800 price region, correcting the steep bearishness that had been in place since mid-June. Despite this upside correction, the directional trend bias for GBP/USD continues to be bearish in line with the overall downtrend since the very beginning of the year. The current retreat from resistance could serve as an initial catalyst for a potential resumption of the downtrend. This directional bias would be strengthened on a re-break below the major 1.5000 figure, and confirmed on a breakdown below the double bottom low around 1.4800. In this event, the next major support objective to the downside resides around the 1.4500 level.
James Chen, CMT
Chief Technical Strategist
City Index Group
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