GBP/USD Daily Chart

5/24/2012 – Price action on GBP/USD (a daily chart of which is shown), as of 5/24/2012, has reached its downside target around the 1.5640 price region, which is also the 61.8% Fibonacci retracement of the latest uptrend run from mid-January to late-April. Therefore, price is currently at a critical juncture.

Having dropped down to hit the key 61.8% retracement level after having spent the entire month of May thus far in essentially a freefall that broke down below a large and significant wedge pattern, the pair currently continues to experience exceptionally bearish momentum.

In the event of continued bearish momentum, which would be confirmed by a further breakdown that breaches the current 1.5640 price region, the next major downside target resides around the important 1.5500 support region.

Upside resistance on any rebound currently resides around the 1.5750 price region.

(Chart courtesy of FXDD – Metatrader. Uptrend lines in green, downtrend lines in red, horizontal support/resistance lines in black, Fibonacci retracements in purple, 200-period simple moving average in blue, 100-period simple moving average in brown.)