Forex: GBP/USD set for reversal after daily pin?

FXstreet.com (San Francisco) - GBPUSD climbed to an intraday high of 1.6260 from an earlier session low of 1.6236 Thursday in Asia, this after peaking at a 3-month high of 1.6305 in overnight trade shedding gains on risk aversion.

The daily chart shows that the market carved out a daily pin, a price action event very encouraging for bears, but formed counter the trend bias. Could this be a sign that the market is primed for a bearish correction after the latest daily run? Valeria Bednarik, Chief Analyst at FXstreet.com says the reversal signal is valid "as long as price holds below 1.6270, immediate resistance level."

The analyst also says: "1.6180 stands as strong support for today, and if below, the downside is exposed back towards 1.6060 area over the next few sessions," says.

Looking at the intraday charts, the BabyPips.com FX-Men Team observes a bearish engulfing candlestick pattern on the GBPUSD 4-hour chart: "The pair, after a strong rally up, seems to have run out of steam. In addition to the reversal candlestick pattern, the Stochastic is also pointing down and moving out of the overbought territory. If this continues, we may see the pair pullback to the Fibonacci retracement levels [of the advance from 1.6000 to 1.6305]."

In the European session ahead, UK retail sales figures will be the main focus, expected to show that spending rebounded in November, anticipated to rise 0.4% MoM after a weak October reading.