GBP-USD: Headed Lower

GBP-USD: The pair's failure at the 1.6694 level saw it collapse this week through key support levels at 1.6466 and 1.6411, its Sept. 23 high/channel breakout point. The pair is now back in its falling channel. We believe that further risk remains to the downside and that the pound should push lower toward its Sept. 30 high at 1.6124. A break there would set the stage for further weakness toward the 1.5708 level printed on Oct. 13. A move below there would trigger the resumption of its short-term downtrend.

In order to avert the current downside threats, the pair must close above 1.6694. If that happens, the next target would be 1.6740, the Sept. 11 high. A loss there would lead the pair to target its year-to-date high of 1.7041. A break through there would cause the pair to resume its medium-term uptrend, which has been on hold since August.

The charts reveal there's more of a chance for a move lower than a move higher. Overall, as long as the pair trades within its falling channel, risk remains to the downside.