GBPUSD continues to meander sideways in a range roughly between 1.6230 and 1.6430, but the pair has spent a lot more time in the lower half of its range over the past couple of days’ trading than the upper half.
In our view is that the downside is the more vulnerable at this stage. Regular readers may recall that we went short around 1.6350-60 levels last week, but now as we approach the range floor, we have decided to square our position and bank around 100 pips profit.
We are not adverse to reinitiating shorts on a break below the range floor, but for now the risk-reward favours exiting shorts and waiting. Should that break occur, next supports are 1.6092 (5 Apr low), 1.5973 (1 Apr low), and 1.5937 (28 Mar low).
If the pair rebounds towards the range highs, we would also be happy to re-enter shorts around 1.6380-1.6410, setting a tight stop above 1.6430. Strong resistance at 1.6428 (8 & 11 Apr highs) should afford us some protection above, with further resistance eyed at 1.6458 (19 Jan 2010 high), and 1.6516 (7 Dec 2009 high).(ibtimes)