GBPUSD - At a pivotal point

Well today we're rejecting the 1.6200 level once again, as the currency pairing is really struggling to sustain the gains above this level.  The USD has suffered severe weakness following the failure for the FED to reduce the buying back scheme, contrary to market expectations, and the palaver over the US debt ceiling and government shutdown.  But this begs the question after all these recent setbacks are we due for a recovery??






You can see from the longer term chart that looking to the upside, that the next significant level is the 38.2% retracement from the 2008/09 sell off at circa 1.6550.  We will need a really positive piece of news I feel to push us back there.

If not and we fail to do so, we could be forming a Double Top chart formation, so we will need to watch the 1.5900 level which would act as its neckline and potentially an area of support on the downside.  The other support of note is the uptrend which was confirmed on the 17th Oct and the maribuzo line from this day at 1.6056 could also act as a support.

The technicals are implying that we might be running out of steam and due for some lower numbers given the divergence in the MACD and RSI indicators.

Charts sourced from ig.com