GBP/USD rose to as high as 1.6306 last week but faced strong resistance fro 1.6309 and retreated sharply since then. Initial bias is neutral this week for some more sideways trading. At this point, we'd expect downside to be contained by 1.6130 resistance turned support and bring another rally. Decisive break of 1.6309 will have larger bullish implication and should target 1.6618/6746 resistance zone next. However, break of 1.6130 will dampen this bullish view and would at least bring deeper decline to 1.6601 support and below...
In a bigger picture, price actions from 1.3503 (2009 low) are treated as consolidations to long term down trend from 2.1161, no change in this view. There are various interpretations on the pattern from 1.3503 but after all, as long as 1.5234 support holds, such consolidation would extend. On the upside, sustained break 1.6300 will likely bring further rise to 1.7043 and above to extend the consolidation pattern....
GBP/USD WEEKLY as of Monday, 24 December, 2012
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 28 white candles and 22 black candles for a net of 6 white candles.
An inverted hammer occurred. If this occurs during a downtrend it implies a reversal. Look for a confirmation of the reversal on the bar.
A long upper shadow occurred. This is typically a bearish signal (particularly when it occurs near a high price level, at resistance level, or when the security is overbought).
A shooting star occurred (a shooting star has a small real body near the bottom of the candle and a long upper shadow). During an uptrend(which appears to be the case with British Pound / US Dollar) the long upper shadow indicates that the bears are gaining control and a top may occur.
A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.
Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.
GBP/USD looks to be in strong bullish mood this week. It might continue its downward trend for today and tomorrow. But most probably GBP will be looking to end this week with positive results against usd.
until and unless GBP/USD closes BELOW 1.6150 level... the pair wud remain bullish and it might attempt to re-test its previous highs made in September.... considering the past week's performance, it sustained itself greatly and didn't fall as Eur/usd did....