GBP/USD FX Price Action Analysis Update – 20th December
- GBP/USD found initial resistance at the 1.6300 area, after our previous update noted that any continued upside would bring the significant double top resistance area around 1.6300 back into focus as a technical point of interest.
- Price has subsequently dropped as low as 1.6237, before seeing another upside move. Yesterday printed a daily timeframe pinbar – not the most convincing in terms of size against such a strong trend – and it did not pierce the resistance area – but noted nonetheless.
- The move to the 1.6300 area never took out the previous highs and the market may yet take another upside run to test a break of 1.6308. This would see the highest GBP/USD level since around September 2011. The 1.6300 level has held on the first move higher but bullish momentum may subsequently a breakout scenario.
- If price can once again turn lower and does not break above resistance the following technical areas could possibly provide a supportive element going forward.
- Initial support has been seen around the 23.6% Fib.
- There is a 23.6, 38.2 Fibonacci and 50% confluence zone around the 1.6190 area.
- The 61.8 and 38.2% Fib levels are aligned around 1.6124.
- The key downside technical level we would be monitoring on any extended move lower is around 1.6170 as per the last GBP/USD analysis update (previous price action resistance level).
- Any upside move, inline with the prevailing trend, will still need to break above the key 1.6308 area resistance highs; a move above this level could potentially see an increased volatility scenario.
- Year end trading could potentially see thin illiquid markets and many participants will be on the sidelines at this stage.
GBP/USD Overview Analysis Chart – 20/12/12
GBP/USD Price Action And Fibonacci Levels – Daily Chart 20/12/12
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