Forex: GBP/USD stalls the fall ahead of 1.5500

With volatility in Cable back on track, doubled since late mid Nov when reached 10 year lows, GBP/USD is last at fresh 6-month lows 1.5522, down -1.68% for the week so far, and -4.42% since start of 2013. Following yesterday's BoE inflation report, when Cable dipped thru the 1.5650 level, next biggest risk event ahead comes Friday with UK retail sales data.

In view of Valeria Bednarik, Chief Analyst at Fxstreet.com: “the hourly chart shows indicators still giving some signs of exhaustion near oversold readings, yet far from suggesting an upward correction,” the analyst notes, adding: “20 SMA in the mentioned time frame accelerated lower, currently acting as dynamic resistance around recent highs of 1.5560/70,” suggesting a “Lower low in the daily chart, supports a downside continuation with 1.5200 still as possible target.”

While CMT and FXstreet.com Independent Analyst Fan Yang points out that “We might anticipate some short-term support here, but if the price continues to slide, the bearish outlook opens up the a key support around 1.5267,” the analyst says, noting “A break above 1.59 is required to neutralize the bearish outlook,” Fan concludes.

Immediate support to the downside for GBP/USD lies at Aug 02 lows 1.5486, followed by Jully 06/25 lows at 1.5454, and July 12 lows at 1.5389. To the upside, closests resistance shows at recent session highs 1.5543, followed by Tuesday's lows at 1.5573, and Feb 05/06 lows at 1.5630.