05 January 2012 at 7:25 GMT
Yesterday saw GBPUSD attempt to reverse Tuesday’s strong gains. The setback though was a limited one – unable to correct more than half of the preceding day’s improvement but this selling pressure/profit taking has continued in Asia and while the extent of the decline remains a concern, intraday signals for sentiment are mildly negative. In view of this our call is Cautiously Bearish while below 1.5647. The immediate objective is 1.5580, yesterday's base, with a move beneath that point targeting 1.5547 or even towards yesterday’s 1.5501 low point.
The risk to this call is that selling pressure is weaker than currently assessed although a fresh outright Buy signal would only be generated by a move through 1.5647, yesterday's European afternoon high. Prices and sentiment should then improve to 1.5672, this week's peak, or even 1.5729.
