GBP/USD retreats from key resistance

<p>GBP/USD (daily chart) as of April 15, 2013, has tentatively retreated from key resistance around the 1.5400 price region, which is also right around the […]</p>

GBP/USD (daily chart) as of April 15, 2013, has tentatively retreated from key resistance around the 1.5400 price region, which is also right around the 38.2% Fibonacci retracement of the steep plunge from the 1.6300 area in the beginning of the year to the 1.4830 low in mid-March. The upside correction within the past month has been rather choppy and irregular, but resulted in a net rally of almost 600 pips to correct the plummet of more than 1500 pips in the last two months.

After the double-test of the 1.5400 resistance area on Thursday and Friday of last week, the price has turned to the downside today to respect the strong resistance around the 38.2% Fibonacci retracement level. Major support currently resides around the 1.5250 area, which is also in the vicinity of the 50-day moving average. A breakdown below that level would give some indication of GBP/USD attempting a continuation of the entrenched bearish trend, with further downside objectives around 1.5000 and 1.4800. A move above 1.5400 would invalidate this indication and likely further the bullish correction that has been in place for the past month, towards the 1.5600 price region.

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