GBPUSD: Follows through Higher On Corrective Recovery.
GBPUSD- A follow-through higher is now in progress having turned ahead of the 1.6768 level(Sept 28’09 high) on Friday last week. Although the pair still remains vulnerable to the downside following its declines off its YTD high at 1.7041, the present strength is set to correct that declines. This suggests that further recovery could see GBP targeting further higher prices towards the 1.6124 level where its Sept 30’09 high is located with a clean break of there bringing additional upside towards the 1.6225 level, its weekly 50 ema. Further out, resistance stands at the 1.6466 level, Sept 23’09 high and then the back of its eroded MT trendline. That zone should reverse roles as support and turn the pair back down allowing for further downside weakness. However, if it is taken out GBP should focus on higher prices aiming at the 1.6740 level, its Sept 11’09 high.. On the downside, reversing its present recovery will mean a return to the 1.5768 level with an eventual loss of there driving the pair further to the downside aiming at the 1.5287 level which marks its .50 Ret(1.3501-1.7041 rally). It psycho level sited at the 1.5000 will be targeted on a break below the latter. On the whole, though GBP is now recovering higher, it is corrective of its declines off the 1.7041 level.
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