The British pound is now trading higher against the US dollar following the retest of the 1.5900 support barrier earlier in the session.  Momentum has now carried the currency pair to trade at 1.5940 – just 44 pips short of the morning high of 1.5984.  Although things are looking up for the pound, short term buying may be thinning out, leaving the pair vulnerable for a downside correction soon.

Although technical indicators are hinting at higher GBPUSD potential in the 15-minute time frame – ie Stochastic reading a 64.91 figure – resistance barriers above the current spot are making the possibility difficult.  Initial barriers at 1.5950 are expected to come into play in the short term, with additional resistance levels above at 1.5966 ensuring a short term turnaround – or US dollar buying pickup.  The 1.5966 is the 38.2% Fibonacci retracement level from the 1.6114-1.5870 bearish decline.  The level coincides with a 1.5945 November 4th session low as well as a declining 200 period  simple moving average – increasing the sustainability of the barrier.

GBPUSD 15-minute timeframe – Source:  FXTrek Intellicharts

Given the technical picture, we anticipate a retest of the 1.5900 on a failure to break through either 1.5950 or the 1.5966.

However, should bullish momentum take the better of the two levels, we would expect the gains to extend to the psychological resistance of 1.6000.