GBP/USD: The pair closed slightly lower on Thursday after printing a 2010 low at $1.4226 and failing to sustain it. This development continues to suggest that GBP could be shaping up for a possible correction.
However, with an offered tone still seen, the pair remains vulnerable to its 2010 low at $1.4226. If trades are made below that level, GBP will resume its medium-term weakness and then eye further pressure towards its March 2009 low of $1.4112 with a break there aiming at its big psycho level at $1.4000.
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While the pair holds below the $1.4473/$1.4516 levels, its May 7 low and May 18 high, respectively, this view remains valid. Alternatively, the pair will have to break and hold above these levels to reduce its current downside threats and bring further recovery towards the $1.4637 level, its May 14 high ahead of the $1.4718 level, its May 11 low. A respite is expected at this level to turn the pair back down again.
With continued downside vulnerability yet to be over, threats remain to the downside though the pair struggling to put in a temporary bottom.
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.