GBPUSD: The pair's cap at the 1.6262 level in early trading today and its subsequent collapse now leaves the 1.6076/56 zone as the next downside target.If that zone is broken, further weakness will develop towards its psycho level at 1.6000 with a loss of that level allowing for further declines towards its Mar 28'2011 low at 1.5934.
Its daily RSI is bearish and pointing lower suggesting further weakness. On the contrary, GBP will have to climb back above the 1.6546 level, its May 31'2011 high to prevent a return to the 1.6056 level, its May 18'2011 low. Above the 1.6546 level will call for a run at the 1.6743 level, its 2011 high and then the 1.6877 level, its Nov'2009 high.
All in all, with GBP remaining under bear pressure, risk of a return to the 1.6076/56 levels is expected.