Top in the Pound?
- Strong negative January seasonality in the Pound
- Important cycle turn window this week
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GBP/USD failed earlier today just below the 15th square root relationship of the 2012 low at 1.6610. This reversal has the potential to be significant given it has come during the Fibonacci cycle turn window we highlighted last week. January is also one of the worse performing months for the Pound on a seasonal basis so several factors seem to be aligning here for decent counter-trend move lower - if not a full-fledged reversal. Key support for us looks to be the 1.6410 level as a daily close below this level will confirm that a top of some importance is indeed in place. The 1.6610 resistance should hold over the next few days if the negative cyclical view is correct
GBP/USD Daily Chart: January 2, 2014
Charts Created using Marketscope – Prepared by Kristian Kerr
Key Event Risks in Coming Sessions:
LEVELS TO WATCH
Resistance: 1.6560 (Gann), 1.6610 (Gann)
Support: 1.6410 (Gann), 1.6380 (Gann)
Strategy: Sell GBP/USD
Entry: Sell GBP/USD at 1.6525
--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com
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