GBP/USD Mid-Day Outlook

Daily Pivots: (S1) 1.3323; (P) 1.3362; (R1) 1.3416; More…

GBP/USD rebounded strongly to 1.3446 today but dropped sharply since then. After all, it’s bounded in range of 1.3307/3471 and intraday bias remains neutral. On the downside, break of 1.3307 will reaffirm the case that corrective rise from 1.3203 has completed. Retest of 1.3203 should then be seen. 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. On the upside, break of 1.3471 will extend the corrective rise. But upside should be limited by 1.3617 resistance to bring fall resumption eventually.

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.