British pound vs US dollar bearish correction to strong support

<p>GBP/USD (daily chart) as of January 4, 2013, has reached down to approach key support around the 1.6000 price region on a bearish correction after […]</p>

GBP/USD (daily chart) as of January 4, 2013, has reached down to approach key support around the 1.6000 price region on a bearish correction after the price was unable to close above the important 1.6300 resistance area on Wednesday. By descending to 1.6000 support on the heels of the US employment report, the price has also approached an uptrend support line that has been respected at least five times since its establishment at the June 2012 1.5266 low. Additionally, the 100-day moving average is currently just above this 1.6000 area.

With this strong confluence of support, a breakdown could be seen as a major price event for the pair, with the 1.5825 area (last hit in mid-November 2012) as a further potential support level to the downside. On any bounce around the 1.6000 area support confluence, which would leave the current uptrend intact, initial upside resistance potentially resides around the 1.6150 and then 1.6300 price regions.


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