GBPUSD - Monthly long-term Overview

The British Pound vs. Dollar is presently trading inside a rising wedge on weekly charts, which itself inscribes inside a falling wedge and bearish flag pattern on monthly time frame. On a long-term appreciation, a 138.2 Fibonacci extension from the up-swing that started in the middle of May could be the target, inside a resistance area of 1.7040, and matching the highs of November 2009 at 1.6875. However in Daily charts we seem to have reached a double top with a strong rejection from psychological level of 1.6100 and price is presently falling towards the lower trend line of the wedge, located at about 1.5690-1.5700 and representing a potential Fibonacci retracement of 50%. Upper line of the wedge and next resistance is at around 1.6450 and could be attempted if the already pierced double top resistance is surpassed, however short-term the pair seems fairly bearish and I would favor a 80% reversion to test the area of daily support, between 1.5500 and 1.5300.

The monthly massive bearish flag suggests to me a fair possibility of a fall to check all-time lows at 1.3500, though on a much longer term span. By now we are seeing there a wide-range consolidation which fluctuates between 1.5300/5500 and 1.6100, needing to break a successive series of support levels at 1.5750, 1.5650 and 1.5550 to achieve the further bearish targets mentioned.

Daily assessment on Friday October 15, 2010 – at market’s close.

GBPUSD	RES2	RES1	SUP 1	SUP 2	R/R	FORECAST	PRICE ACTION
Monthly	2.1164	1.6742	1.4095	1.3506	1:2.4	Bearish - ranging	Touching desc. channel UTL
Weekly	1.7520	1.6237	1.5188	1.3506	1:2.8	Bearish - ranging	Consolidation
Daily	1.5146	1.3817	1.2846	1.1957	1:3	Bearish	Possible double top