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GBP/USD: Breaking Down | Technical Analysis 12th December 2013

The breakout from the flag pattern failed to follow through in the end and instead the exchange rate fell back down. It has been trading in a range-bound sideways move but is now breaking down out of that as well, and threatens to accelerate lower.

A breakout from the consolidation at the highs could fall to support at 1.6115, although support from the monthly pivot at 1.6200 is another possible target. A bullish outlook is supported by long-term trends and a break above 1.6485 might provide confirmation of more upside, targeting 1.6550, although the current breakdown this morning makes that seem unlikely now.

Analysis by: Joaquin Montfort - Liga Forex Analyst on GBPUSD