GBPUSD - Coming under first real sign of pressure

The GBPUSD is testing the trend support line from the July13 rally.  We shall see whether there is further impetus in the next couple of days and drive the currency through this support line.  Disappointing economic data in the new year is making investors wary of whether the markets can sustain their recent record highs in the short term, and seeking comfort in 'safe haven' currencies as of late.

The first significant support level on the downside is 1.6215 as indicated on the chart, after which the next targets are quite some way off given the extent of the Jul 13 - Jan 14 rally.  We have the 38.2%, 50% and 61.8% Fibo retracements at 1.5920, 1.5710 and 1.5493 respectively.

If however we have a strong rally off the trend line and the first level that we should pay attention to on the upside is today's Maribuzo line at 1.6427.  Given the strength of the Maribuzo from the 2nd Jan down move, this implies that it could definitely be worth noting.   This level also coincides with the 20Day SMA at 1.6436 offering potentially further resistance, after which we have the 1.6500 and 1.6603 levels slightly higher up.







Charts sourced from ig.com