By Mohammed Isah of fxtechstrategy.com
: Despite the pair's price hesitation on Friday following its Thursday sell off to a low of 1.6078, it continues to retain its downside bias triggered at the 1.6875 level, its Nov 16'09 low.
To see a chart of the cross currency pair,
While both intra day gains and losses were reversed ending Friday's trading session on a flat note, as long as GBP holds and trades below its broken longer-term uptrend, the risk of further downside remains towards the 1.5706 level, its Oct 13'09 low, where a breach will see a 100% price retracement (from 1.5706- 1.6875 levels) and open the door for additional downside towards its .50 Ret (1.3501-1.7041 rally) at 1.5273.
Its daily RSI is bearish and pointing lower suggesting further downside.
Conversely, above its Nov 25'09 high at 1.6744 and the 1.6875 level, its Nov 16'0-09 high must be traded to reverse its current nearer-term downside threats and bring further gains towards its YTD high at 1.7041 level where a decisive invalidation will resume its medium term uptrend towards its .50 Ret (2.1160-1.3501 decline) at 1.7314.
Overall, GBP remains vulnerable to the downside while holding below the 1.6744/1.6875 levels as well as its broken longer term rising trendline.
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.