GBP/USD 1H Chart 12/14/2012 9:05AM EDT
Consolidation under 1.6178: Following with the previous update, which observed a bullish GBP/USD heading toward the 1.6178 resistance pivot. Instead, it was unable to push through 1.6170 before it went into consolidation mode in the 1H chart. Still even in the 1H chart, the technical conditions are still bullish. Note that cable is trading above the 200-hour SMA. The RSI is stuck between 40 and 60 in consolidation, but was previously tagging 70, so the momentum is bullish to flat.
Support factors: We already saw the 1.6095-1.61 area provide demand for GBP/USD. The 200-hour SMA is right there as well. A break below 1.6090 clears this pivot area and opens the market to the next key support fact, a rising trendline going back to mid-November. Above this trendline, the GBP/USd still has bullish structure. For me, the a true sign of bearish market development requires a break below 1.6060. This action would clear the trendline and a previous support/resistance pivot.
Otherwise, if the market pushes above 1.6150 during the 12/14 US session, it shows that bulls are still in charge, and focused is back on the 1.6178 and 1.63 resistance levels. If the RSI pops back above 60 after failing to push below 40, it reflects bullish continuation momentum.