Thursday, May 20, 2010

Forex GBP/USD capped below 1.4400/05 area

Pound's recovery from 144-month low at 1.4235 has been halted at 1.4465 high on Asian session, and the pair dropped to 1.4315 at European opening, to pick up, favoured by improved market sentiment, although Sterling remains capped below 1.4400/05 resistance area.

On the upside, above 1.4400/05, (intra-day resistance), the pair might find resistance at 1.4465 (May 19 high) and 1.4525 (May 18 high). On the downside, support levels lie at 1.4320 (session low), and below here, 1.4275, and then 14-month low 1.4235 (May 19 low).

The pair is going through short-term consolidation, says by Slobodan Drvenica, technical analyst at Windsor Brokers Ltd, who foresees a return to 1.4517/47: "Undergoes short-term consolidation just above 1.4235, yearly low. While 1.4273 holds, return towards 1.4517/47 area is not ruled out, however, medium-term bias remains firmly to the downside following a push through key 1.4475 support on 17 May."

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