Candlestick analysis of the GBP/US for November 29, 2010
On a 4-hour graph the GBP/USD continues to decline. As it was expected the GBP/USD has broken through the support level of 1.5661. We expect the decrease with target to 1.5500 after a pullback.
The outlook is bearish, as earlier the pair formed the combination of candlesticks Bearish Engulfing that indicates the decline, confirmed further.
This combination of candlesticks emerged after the currency pair could not break through the resistance level near 1.6085-1.6096, which means that the bulls did not manage to fixate here. Further, the bears started to increase their influence.
A breakout of 1.5841 confirms this point of view.
However, it is worth pointing out that in case the resistance level of 1.6096 is broken through then short positions should be closed, as it will lead to increase to 1.6173.
Performed by Vladimir Donin, Analytical expert
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