GBPUSD - We continue to claim that the British Pound is headed for further recovery against the US dollar, as sentiment had clearly reached extremes on GBPUSD declines. Such dynamics are visible in our recent GBPUSD COT Analysis and increased financial media attention on GBP weakness. We wrote recently, “A rally through 1.7705 would signal that the short term trend is up.” The next noteworthy resistance mark now becomes previous spike-highs at 1.7978.

The trend is considered down as long as price is below 1.7974. As low as oscillator readings are on the daily, there is little on the intraday charts that suggest a major turn from current price. Even a push through 1.7705 could complete a flat correction and would not be enough to suggest that the decline is over. Of note is that the pair is now in the middle of a significant congestion and support area from late 2005/early 2006.


source : dailyfx