May 7, 2013 – GBP/USD (daily chart) has stalled just below key resistance around both the 1.5600 level and the 50% Fibonacci retracement of the steep plunge from the beginning of the year to mid-March. This confluence of resistance has been a strong barrier over the past week to the pair’s further advance after its sharp rise in late April. From a trend perspective, price is currently entrenched within a clear uptrend from the 1.4830 mid-March low, which represents a bullish correction of the noted downtrend from the beginning of the year to mid-March.
Major downside support within this bullish correction currently resides around the key 1.5400 level. If price is able to muster the strength to break out above the resistance imposed by the 1.5600 level and the noted 50% retracement level, the next major price objectives to the upside reside around 1.5750 and then 1.5825.
James Chen, CMT
Chief Technical Strategist
City Index Group
Forex trading involves a substantial risk of loss and is not suitable for all investors. This information is being provided only for general market commentary and does not constitute investment trading advice. These materials are not intended as an offer or solicitation with respect to the purchase or sale of any financial instrument and should not be used as the basis for any investment decision.
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