GBP/USD Mid-Day Outlook

Daily Pivots: (S1) 1.3333; (P) 1.3379; (R1) 1.3416; More…

GBP/USD drops to as low as 1.3307 so far today. Break of 1.3341 minor support indicate completion of corrective rise from 1.3203. Intraday bias is now on the downside for 1.3203. Break will resume the fall from 1.4376 to 50% retracement of 1.1946 to 1.4376 at 1.3161 first, and 61.8% retracement at 1.2875 next. Nonetheless, above 1.3424 minor resistance will extend the corrective rise through 1.3471 before completion.

In the bigger picture, current development suggests that whole medium term rebound from 1.1936 (2016 low) has completed at 1.4376 already, with trend line broken firmly, on bearish divergence condition in daily MACD, after rejection from 55 month EMA (now at 1.4223). 61.8% retracement of 1.1936 (2016 low) to 1.4376 at 1.2874 is the next target. We’ll pay attention to the reaction from there to asses the chance of long term down trend resumption. For now, outlook will stay bearish as long as 1.3617 resistance holds, even in case of strong rebound.