GBP/USD: Having broken and held above the 1.5660 level and put in a temporary bottom at 1.5344, GBP is building on that strength. We have also been watching GBP on the crosses and have seen GBP/JPY and GBP/CHF strengthening as well. This is further evidence that the GBP/USD pair has more upside to go with its present breakout. Our minimum upside target stands at the 1.5906 level, its high of Dec. 14, 2010, at which the pair may face the bears on an initial test. Conversely, if a decisive penetration of that level occurs, we should see the pair targeting its Nov. 19, 2010 high at 1.6091 followed by the 1.6296 level, its Nov. 4, 2010 high. Its daily stochastics are bullish and pointing higher supporting this view. To annul our upside view, the pair will have to break and hold below the 1.5344 level. This will resume its short-term weakness and turn focus to its September 2010 low at 1.5296 and subsequently its psycho level at 1.5000. All in all, having bottomed out at the 1.5344 level and triggered a strong recovery, further upside risk is expected.