GBP/USD Mid-Day Outlook

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

A temporary low is in place at 1.3146 after hitting 50% retracement of 1.1946 to 1.4376 at 1.3161. Intraday bias is turned neutral for some consolidations. Recovery should be limited well below 1.3471 resistance to bring fall resumption. Break of 1.3146 will extend the whole decline from 1.4376 to 61.8% retracement at 1.2875 next.

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.