GBP/USD Stalls Below Major 50% Resistance

<p>May 7, 2013 – GBP/USD (daily chart) has stalled just below key resistance around both the 1.5600 level and the 50% Fibonacci retracement of the […]</p>

May 7, 2013 – GBP/USD (daily chart) has stalled just below key resistance around both the 1.5600 level and the 50% Fibonacci retracement of the steep plunge from the beginning of the year to mid-March. This confluence of resistance has been a strong barrier over the past week to the pair’s further advance after its sharp rise in late April. From a trend perspective, price is currently entrenched within a clear uptrend from the 1.4830 mid-March low, which represents a bullish correction of the noted downtrend from the beginning of the year to mid-March.

Major downside support within this bullish correction currently resides around the key 1.5400 level. If price is able to muster the strength to break out above the resistance imposed by the 1.5600 level and the noted 50% retracement level, the next major price objectives to the upside reside around 1.5750 and then 1.5825.

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (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.