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GBPUSD: Strengthens, Bullish Into The New Week

GBPUSD: The pair ended the week strongly higher breaking through the 1.6301 level, its May 20’2011 high to follow through higher on its previous week gains.

This development now leaves GBP targeting its nearby resistance at the 1.6516 level, its May 11’2011 high where a decisive violation will set the stage for further strength towards the 1.6743 level, its 2011 high.

Above here will resume its long term uptrend towards the 1.6877 level, its Nov’2009 high and subsequently the 1.7039 level, its 2009 high. Its weekly RSI has turned higher suggesting further strength.

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Alternatively, the risk to the pair’s present upside offensive will be a return below the 1.6056 level, its May 24’2011 low. This will extend further declines towards the 1.5935 level, its Mar 28’2011 low and possibly lower.

USDCHF: Breaks The 0.8553 Level, Extends Weakness.

USDCHF: Having followed through lower on the back of its previous week losses and broken below its May 04’2011 low at 0.8553 at the end of the week, further downside pressure is likely in the new week.

With that said, a push further lower will target the 0.8400 level, its psycho level though the pair has to initially overcome its nearby support at 0.8500 level, its psycho level to aim at 0.8400.

Further down, support stands at the 0.8300 level and then the 0.8200 level, all representing its psycho levels. The pair’s psycho levels are necessary as supports as USDCHF is now seen in an uncharted territory.

Its weekly RSI is bearish and pointing lower suggesting further weakness. Alternatively, on any recovery, its broken support at the 0.8553 level should reverse roles and provide resistance thus turning it lower.

However, on a push through that level, risk of further strength will build up towards the 0.8706 level, its May 2011 low and subsequently the 0.8946 level, its May 13’2011 high. Further out, resistance comes in at the 0.9013 level, its April 19’2011 high.