GBPUSD: With the pair breaking and holding below its key support at the 1.5874/50 zone on Tuesday and following through lower during Wednesday trading, further downside risk is likely in the days ahead. In such a case, the 1.5682 level, marking its Oct 20’2011 low will be targeted with a violation of there turning attention to the 1.5632 level, its Oct 18’2011 low. Further down, support lies at its Oct 12’2011 low at 1.5541. Its daily RSI is bearish and pointing lower suggesting further weakness. Alternatively, the risk to this analysis will be a return above the 1.5874/50 zone. This will clear the way for a run its key resistance located at the 1.6161 level, its Oct 31’2011 high where a breach will resume its short term uptrend towards the 1.6204 level, its Sept 06’2011 and subsequently its Aug 30’2011 high at 1.6418. On the whole, GBP is now under pressure with the risk of weakening further towards the 1.5682/32 levels.
