Written By : ForexAbode.com || Saturday, 12 January 2013 00:00 GMT

GBP/USD Weekly Outlook - Jan 12, 2013

British Pound - US Dollar (GBP/USD) very briefly went as low as 1.5992 but as mentioned during the last weekend, the 1.6000 psychological support worked and the currency pair jumped to 1.6179 before closing for the week at 1.6132. Again as mentioned during last weekend, a break over 1.6180 and then 1.6206 are critical for further upward gains. The resistance came just 1 pip below the mentioned 1.6180. Overall the recent price action indicated that the 1.6000 support is holding and that supports a mildly bullish outlook. On the upside if break over 1.6180/1.6206 resistance zone takes place then we would expect further gains for a retest of 1.6381. Please note that before that some extended volatile sideway action may take place but as long as 1.5992/1.6000 support holds, the near-term outlook will stay for upward gains. On the downside any break below the recent 1.5992 will neutralize the near-term bullish sentiments. Please check this GBP/USD alert which shows that such a move will not only represent the failure of 1.6000 support but also a break of the mid-term trend line support. Such a move should bring further downward consolidation first towards a minor support near 1.5962 (the low of November 28th). Any break below this should target 1.5920 support and then possibly 1.5882 i.e. support of November 21.

Trading Strategies

As mentioned above that we expect some further gains but we will wait for a break above the immediate resistance zone of 1.6180/1.6206. If that takes place then we will target 1.6250/1.6380 for long positions. Any break below 1.5992 will take us towards short-selling.

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