GBPUSD: With continued downside weakness seen, the possibility of further weakness is expected. The risk is for GBP to weaken further towards the 1.6164 level, its April 18’2011 low and then its psycho level at 1.6000.
A halt is expected at that level to turn the pair back up. Its daily RSI is bearish and pointing lower supporting this view. Alternatively, the pair will have to break and hold above the 1.6516 level, its May 11’2011 high to end its present weakness and then open the door for a move towards the 1.6743 level and then the 1.6877 level, its Nov’2009 high.
A loss of the latter level will pave the way for further strength towards its bigger resistance at the 1.7039 level, its 2009 higher. All in all, GBP remains biased to the upside in the long term but continues to face corrective weakness risk.