FX.co ★ GBP/USD candlestick analysis for January 11, 2011

On a 4-hour graph the GBP/USD is still trading in the range between 1.5345 and 1.5665. Nevertheless, the viewpoint on the pair is still bearish as the downtrend remains.
Earlier the pair dropped sharply after it failed to break the resistance level of 1.5900. Nevertheless, if the GBP/USD manages to close above the 1.5665 level, 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.