GBP/USD – Still under the channel

The Pound kept trading above the support specified in yesterday’s report 1.5543 (the low after issuance of yesterday’s report was 1.5547), but it also was not able to break or even test or even come close to the resistance 1.5704. It seems that this sharp trend is not tired yet, especially after breaking the falling trend channel to the downside, which contributed to this sharp drop. Thus, we will maintain a negative outlook, as long as the price is trading below the bottom of the channel which is at 1.5683 currently. And even though the price is far from this level at the moment, we will consider this to be resistance of the day, and only if it is broken that we will change our long held negative outlook. If this surprise happens, and we break 1.5683 we will target short term Fibonacci retracement levels 1.5800 & 1.5863. As for the support it is at 1.5603, and breaking it would indicate that this Dollar tornado will not stop soon, targeting 1.5479 & the important 1.5350.

Support:
• 1.5603: the rising trend line from 1.5532.
• 1.5479: Nov 26th 2008 high.
• 1.5350: May 12th high.

Resistance:
• 1.5683 the bottom of the falling broken trend channel.
• 1.5800: Fibonacci 50% for the last drop from 1.6067.
• 1.3863: Fibonacci 61.8% for the last drop from 1.6067.