October 25, 2013 – GBP/USD (daily chart) has stalled for the past week in a tight, low-volatility consolidation just below major resistance at 1.6300. The 1.6300 level is an exceptionally strong resistance area, as it has been tested and held firmly on at least three occasions in the past year and a half. The current consolidation pattern underneath this resistance occurs within the context of a long and steep uptrend that has been in place since July’s re-test of the 1.4800 support area. Despite having a major resistance barrier immediately above, most technical indications are still pointing to the upside. If the pair is able to reach and breach the 1.6300 level, further upside price objectives reside at the important 1.6500 and 1.6750 levels. To the downside, any breakdown of the current steep uptrend should meet strong support once again around the key 1.6000 technical and psychological level.
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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