FX.co ★ GBP/USD candlestick analysis for December 29, 2010

On a 4-hour graph the GBP/USD is still in downtrend. Earlier the pair dropped sharply after it failed to break out the resistance level of 1.5900.
As mentioned before, on a 4-hour graph the GBP/USD formed the combination of candlesticks Bearish Engulfing which indicates the decline, confirmed further.
This combination of candlesticks developed after the currency pair could not break through the resistance level near 1.6085-1.6096, which means that the bulls did not solidify here. Further the bears started increasing their influence.
A breakthrough of 1.5841 means that this point of view is correct.
Nevertheless, if the resistance level at 1.5650 is broken, it is recommended to close short positions as it will lead to an increase to 1.5900.