GBPUSD: Having violated the 1.5497/1.5521 levels and reversed its previous week losses to close the week higher, GBP is set to strengthen further in the coming week. This is coming on the back of a corrective recovery triggered from the 1.5235 level, its Jan’ 2012 low. We are looking for the pair to strengthen further towards its .382 Fib Ret (1.6161-1.5235 declines) at 1.5582 with a break setting the stage for further recovery towards the 1.5666 level, its Jan 03’2012 high. Further out, resistance lies at the 1.5691 level, its .50 Fib Ret. Its daily and weekly RSI are bullish and pointing higher suggesting further strength. On the downside, the risk to our upside view will be a return to the 1.5270 level, its Oct 2011 low and then the 1.5235 level, its Jan 2012 low. A break of the latter will aim at its .618 Fib Ret (1.4229-1.6736 rally) at 1.5187 and subsequently, its big psycho level at 1.5000 comes in as the next downside target. On the whole, GBP continues to correct higher suggesting further price extension towards the 1.5582 level.
