FX.co ★ GBP/USD Intraday Technical Analysis and Trading Recommendations for December 31, 2012

The GBP/USD pair has been fluctuating heavily within the past few weeks failing to maintain a directional long-term trend.
On the midterm aspect, consolidation came again above 1.5970. Getting back inside the previous consolidation range indicated that the upper limit around 1.6160 would be visited. It took place last week with further bullish pressure towards 1.6300, corresponding to 78.6% Fibonacci Level, where the GBP/USD pair expressed significant bearish reaction reflected in the inverted hammer daily candlestick depicted on the chart.
On the 4H chart the GBP/USD pair expressed significant bearish price action reaction towards 1.6300 corresponding to the upper limit of the depicted bullish channel.
Bearish reversal pattern (4H double top was expressed), which indicated bearish retracement to take place, followed by strong bearish pressure reflected in the bearish engulfing daily candlesticks.
Last week, the lower limit of the depicted bullish channel was broken down which is being retested now around 1.6175 providing a valid SELL entry with SL located above 1.6200.
Price Level around 1.6105 should be watched today as it constitutes a strong Intraday Support. Failure to fixate below it gives an early warning for bullish bias for the pair today.
Breakdown below the Intraday Support Price Zone 1.6125 - 1.6100 is necessary to maintain the long-term bearish movement.

Technical resistance levels: 1.6200, 1.6240, and 1.6300.
Technical support levels: 1.6105, 1.6080, and 1.6000.