British pound vs US dollar finds tentative support around 1.6000 again

<p>GBP/USD (daily chart) as of October 22, 2012, has once again tentatively found some measure of support around the important 1.6000 figure after dropping to […]</p>

GBP/USD (daily chart) as of October 22, 2012, has once again tentatively found some measure of support around the important 1.6000 figure after dropping to the current level from its highs around the 1.6150 resistance area late last week.

The current return to 1.6000 support retests the bounce from this level that occurred just two weeks ago. This 1.6000 area not only represents a key psychological support level, but also the 38.2% Fibonacci retracement of the bullish trend from the August 1.5500 area low to the September 1.6300 area high.

Furthermore, the 50-day moving average also currently resides around this area. With this strong confluence of support, if 1.6000 is able to hold, another bounce could push GBP/USD back up towards 1.6150, with a further potential reach towards the long-term highs around 1.6300. To the downside, if price cannot hold above 1.6000, a key potential support area on any further downside correction resides around the 1.5750 price region.

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.