GBP/USD - GBP/USD finds support at 1.6070 - 09/10/2014 (GMT)

• GBP/USD continued declining after Monday’s bearish gap, reaching and falling below 1.6120 (a level mentioned in previous comments). However, the pair found support at 1.6070 (S1) and rebounded to trade back above 1.6120. After an extended period within its oversold field, the RSI moved above its 30 line, while the MACD has bottomed and crossed above its signal line. Taking these indicators into account, I cannot rule out the continuation of the rebound, perhaps to test the 1.6260 (R1) zone as a resistance. Nevertheless, taking a look on the daily chart, I will repeat that since Cable is printing lower lows and lower highs below the 80-day exponential moving average, the overall path remains to the downside and I would expect a possible dip below 1.6070 (S1) to pull the trigger for the psychological zone of 1.6000 (S2). I would see any extensions of yesterday’s rebound as a corrective move before sellers take the reins again.
• Support: 1.6070 (S1), 1.6000 (S2), 1.5870 (S3)
• Resistance: 1.6260 (R1), 1.6350 (R2), 1.6460 (R3)