GBP-USD: While the pair may be hesitating after halting its nearer-term rally on Thursday, we expect its June 2, 2010 high at 1.4768 to provide support on pullbacks. This should turn the pair back up and push it toward the 1.5000/52 levels. That zone is crucial to the continuation of its recovery as a break will open the door for further gains toward the 1.5308 level, its May 2010 high. However, we expect that zone to provide a strong resistance on initial test and turn it lower, if tested.
The daily studies are bullish and pointing higher, suggesting further up move. On the contrary, a decisive clearance of the 1.4569 and the 1.4344 levels must occur for its present strength to halt and open risk toward the 1.4257/26 levels. Below that will reverse its corrective recovery and create scope for the resumption of its broader weakness from the 1.7041 level toward its March 2009 low at 1.4112 and then its big psycho level at 1.4000. All in all, with its nearer-term recovery remaining intact, a decisive break above the 1.4935 level will open the door for more strength.
Mohammed Isah is a technical strategist and head of research at FXTechstrategy.com, a technical-research Web site. He has been trading and analyzing the foreign exchange market for the past seven years. He formerly traded stocks before crossing over to the forex market, where he worked for FXInstructor LLC as a technical analyst and head of research before joining FXTechstrategy.com. He has written extensively on the forex market and technical analysis and his articles have been featured in The Technical Analyst Magazine, The Forex Journal Magazine, The International Business Times and FXstreet.com. At FXTechstrategy.com, he writes daily, weekly and long-term technical commentaries on currencies and commodities, which are offered to its clients. He also produces
for his subscribers. He provides full coverage of the forex market with specific focus on G10 currencies as well as the commodities markets, with focus on five key commodities.