GBP-USD: Set to Capture Key Support

NEW YORK (fxtechstrategy.com) -- The pound-dollar currency pair is maintaining a firm hold on its medium-term downtrend. It followed through lower this past week on the back of the previous week's losses.

The pair tested a low of 1.5235 this past week, but it failed to hold below 1.5270, its October 2011 low.

A convincing violation of the level is required to convince the market of further bearish momentum.

If it is breached, momentum could push the pound-dollar currency pair toward its 0.618 Fibonacci retracement at 1.5187 (1.4229-1.6736 rally). A cut through here will set the stage for a run at the pair's big psychological level at 1.5000, where a breather may occur.

GBP-USD's weekly relative strength index is bearish and pointing lower, suggesting further weakness.

Alternatively, on any recovery higher, the pair will have to return to more than 1.5497, its Jan. 10 high, to reduce its present weakness.

If the pair breaches that level, it should see further strength toward the 1.5770/1.5779 levels where a violation will send the pair further higher toward 1.5885, its Nov. 18 high, and then 1.6161, its Oct. 31 high.

-- Written by Mohammed Isah.

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