BUZZ-COMMENT-January could see sterling's fourth straight month of losses

Jan 16 (Reuters) - Sterling is at risk of racking up a fourth consecutive month of losses versus the dollar and January could prove significant as long-term support levels come into view.

January 2016 was the last time sterling had such a poor start to a year and that 489-point drop could be bettered this year if key downside levels are breached.

GBP/USD has fallen below its monthly Ichimoku cloud top, 1.2288, and the 1.2018 base of the cloud provides a bear target. The low from October 2023 is just ahead at 1.2038.

A key 50% Fibonacci retracement level, taken off the 1.0327 to 1.3430 September 2022-September 2023 bull run is at 1.1879 and the March 2023 low is at 1.1805.

Fourteen-month negative momentum has flipped to negative, the first time since May 2023. The monthly relative strength index at 42 leaves room for sterling to add further to its early January losses.

The significant 1.0327 low from 2022 provides the ultimate bear target and if the monthly bear trend builds up a head of steam, the September low could become a viable objective for 2025.

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(Peter Stoneham is a Reuters market analyst. The views expressed are his own)

((peter.stoneham@thomsonreuters.com))