GBP/USD Daily Outlook

Daily Pivots: (S1) 1.3125; (P) 1.3199; (R1) 1.3249; More…

Intraday bias in GBP/USD remains on the downside for the moment. Decline from 1.4376 is in progress. Sustained break of 50% retracement of 1.1946 to 1.4376 at 1.3161 will pave the way to 61.8% retracement at 1.2875 next. On the upside, break of 1.3471 resistance is now needed to indicate short term bottoming. Otherwise, outlook will remain bearish in case of recovery.

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 1.4177). 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 55 day EMA (now at 1.3527) holds, even in case of strong rebound.