Bullish breakout above 1.6250 took place on November 27. The GBP/USD pair successfully achieved its projection target around 1.6600 which constitutes an Intraday resistance level.
Bullish movement took place above price level of 1.6600 reaching the recent high at 1.6666. However, bearish engulfing daily candlestick was expressed off these high levels (1.6666) on Friday.
Consolidations around 1.6590-1.6600 showed indecision during the past two days. This indicated lack of bullish momentum. The pair was brought back below 1.6600 extending down to 1.6530 and 1.6460 as well.
The next DEMAND level is located at 1.6300 where a recent buttom was established on January 20.
Bullish recovery was witnessed upon the previous testing of price zone of 1.6450-1.6500 corresponding to Demand zone between 50% and 61.8% Fibonacci levels.
As mentioned before, the GBP/USD pair remains neutral until it breaches 1.6666 or breaks down price level of 1.6450 (which is being tested today).
Fundamentally, Net lending cash to individuals increased more than expected in December indicating worsening of credit situation. This enhanced today's aggressive bearish movement.
Fixation below 1.6450 will probably apply further bearish pressure towards 1.6400 then 1.6320. However, price action should be watched cautiously as we may see a bullish correction off these levels.
The material has been provided by InstaForex Company - www.instaforex.com
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