GBPUSD approaches key technical resistance at 1.6309. Looking for profit taking sellers.

• gregmikefx
• January 13th, 2010

The GBPUSD is approaching the key 100 day moving average at the 1.6309 level (high reached 1.6293 today). The GBPUSD has been supported today by a comment from BOE Andrew Sentance who said the central bank may have to raise rates in 2010.  This increases the demand for the currency.

Nevertheless,  I would expect that the market should find profit taking sellers as the market momentum slows before the key level.  Trader’s will use the level as a low risk back board, with a break above leading to covering.  On a break, the next target would come in at the 1.6354 level which is the 50% retracement of the move down from the November high.

Support today comes in a the 1.6232 level now where the 38.2% retracement level is found (from high of 1.6876 in November to the low reached in December at the 1.5832 level).  The level is also the 38.2% retracement of the days trading range today (see 5 minute chart below).

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Tickers: GBPUSD

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