FX.co ★ GBP/USD candlestick analysis for December 30, 2010

On a 4-hour graph the GBP/USD is approaching the upper limit of the downtrend. The viewpoint on the pair is still bearish. Earlier the pair dropped sharply after it failed to break out the resistance level of 1.5900. Nevertheless, if the 1.5650 level is broken it will be recommended to close short positions since this will lead to advance to 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.