09.05.201211:49 Forex Analysis & Reviews: GBP/USD Intraday Technical Analysis and Linear Regression Channels for May 9, 2012

Long-term review

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Having reached the price level 1.6300, the GBP/USD pair has been trading in downside movement within the narrow-ranged bearish violet channel until Monday when we had a bullish breakout.

On Tuesday we mentioned that in order to remain bearish in the nearest future the GBP/USD pair was not to hold above 1.6160, which had been broken yesterday then followed by a failure to stabilize above the mentioned level.
A breakdown of the resistance level 1.6160 opened the way to the point 1.6195 which pushed the GBP/USD pair to the downside again to close below 1.6140-1.6160. However, GBP/USD is still trading above the broken bearish violet channel and within the bullish blue channel which hasn't been broken till now.
It's better to wait for a confirmation to determine the next destination for GBP/USD which will be either a re-closure above 1.6160 or a break through the lower limit of the Blue channel at 1.6115.

On the hourly chart we can obviously see a significant support level at 1.6100 which corresponds to the lower limit of the Yellow channel.
In order to activate the bullish scenario, the GBP/USD pair should initially break through resistance level at 1.6150 (the intermediate line of the Yellow channel and the upper limit of the violet bearish channel).
Breakdown of support level 1.6100 will probably lead to a quick decline towards 1.6050. However, appearance of bullish price action towards it brings bullish strength into the market targeting at 1.6150 and then at 1.6190.

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