GBP/USD for Monday, February 4, 2013
Its fall over the last couple of weeks from 1.5850 has seen it trade down below 1.57 to levels not seen since August last year. It rallied solidly during the last week only to finish the week in a slump and strong fall resulting in a close below 1.57 again. Over the last month or so, the Cable has met excess supply around 1.63 and 1.6150 as both of these levels have become strong resistance levels forcing the price away and back below 1.60. This fall has continued down to the key 1.5850 level which temporarily halted the decline for a few days only to see the Cable continue lower. Over the bigger picture, the Cable has now traded within a wide range of 6 cents over the last four months or so, as these levels continue to play a role every time the price approaches one of them.
Also over the last month or so, the Cable has displayed interesting price action as it has firmly established some key levels 150 pips from each other. These levels are at 1.63, 1.6150, 1.60, 1.5850 and most recently 1.57. Over the course of the last few weeks, the Cable has fallen sharply from levels not seen for about 15 months up near 1.64. Does the GBP/USD have another strong rally left in it to bounce off 1.57 again and move back to the key 1.5850 level?
(Daily chart / 4 hourly chart below)