GBP/USD Weekly Technical Report 22-26/10/2012

 With a bearish engulfing candlestick pattern which was followed by a black one, traders have confirmed the solidity of 1.6180 where 88.6% of the XA leg of our efficient bearish harmonic double top Bat pattern exists. Now, the pair is re-testing SMA 50 once more; whilst technical indicators have turned bearish suggesting further debasement over upcoming hours as we believe that the bearish momentum is strong enough to take the pair towards the second technical objective of the harmonic study at 61.8% Fibonacci of the CD leg. Ultimately, a break below 1.5960 will confirm and accelerate the awaited descending wave.

The trading range for this week is among key support at 1.5730 and key resistance at 1.6250.

The general trend over short term basis is to the      downside      targeting      1.4225      as far as areas of     1.6875       remain intact.

Support    1.5985    1.5925    1.5880    1.5820    1.5760
Resistance    1.6075    1.6125    1.6180    1.6225    1.6250
Recommendation    Based on the charts and explanations above our opinion is, selling the pair below 1.5985 targeting 1.5750 and stop loss above 1.6180 might be appropriate this week.