By: DailyForex.com
The GBP/USD started gaining strength on April 30th after hitting a high not seen since September 2011 but was not able to make a new low for the same time period, only trading as low as 1.5267 on June 01, 2012. With strong support at 1.5350, the pair turned bullish at this level and remains bullish at the moment. Price has closed, and opened above the weekly pivot gapping up about 27 pips from its close last week. Price is currently trading above the 23.6% retracement level at 1.5511 and below a weekly S/R zone at 1.5585. Both the Monthly Pivot and Weekly R1 join each other & the 38.2% retracement level of 1.5660. This is the level that will need to break for the Bulls to push prices higher, but if it cannot we will most likely see the GBP/USD sink lower quite quickly under the spill off weight of the EU debt crisis, issues in Spain & Greece, and Cypress making noises that it will be asking for help as well. Although the Sterling is a strong stand alone currency, it can't help taking a hit when the rest of the region is under so much pressure. My outlook for this week is more bearish than bullish, and cautiously at that.
Happy Trading!