Pound/Dollar: Although the outlook for GBP remains higher in the long term, the possibility of a corrective pullback continues to increase as the pair is presently weakening following a turn ahead of its April 28’2011 high at 1.6743.
This development could see the pair weaken further towards the 1.6598 level, its April 21’2011 low where a break will set the stage for additional downside pressure towards its breakout point seen at 1.6361 level.
A reversal of roles as support is expected to occur there and turn the pair back up. Other supports if the 1.6361 level gives in are located at the 1.6164 level and the 1.6000 level, its big psycho level.
On the other hand, the pair will have to break and hold above 1.6743 level to reverse its present bear threats and then bring further upside gains towards the 1.6877 level, its Nov’2009 high.
A loss of that level will pave the way for more strength towards its bigger resistance standing at the 1.7039 level, its 2009 higher.
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