The GBP/USD, also known as the Sterling or Cable, finally broke a technical and psychological support level of 1.5900 on Friday. 1.5900 is seen by some as a key level for the pair but doesn't mean the bears have won the war just yet, only just on battle. The real challenge comes now with this pair finding support and resistance many times between 1.5840 & 1.5900 over the past year. The pair is now entering a 'traffic' zone where support/resistance occurs frequently and typically causes a currency pair be 'range bound' while the bears and bulls battle it out for supremacy. Support will now fall every 40-60 pips all the way down to about 1.5340 making it very difficult for the bears to simply 'run with the ball'. Watch for levels such as 1.5840, 1.5786 & 1.5716 to be important support factors, while resistance brings its team to the front lines at 1.5940, 1.5979 & 1.5995. There are several major impact news events this week from both the USA and the EU that could heavily impact this pair this week. The big ones being the situation in Greece, BOE Inflation Report and Retail Sales/Unemployment numbers from the USA. I am cautiously bearish for the time being.
Happy Trading!