GBP/USD Mid-Day Outlook

Daily Pivots: (S1) 1.3223; (P) 1.3279; (R1) 1.3337; More…

For now, the corrective from 1.3101 could still extend higher. But even in that case, we’d expect strong resistance from 1.3471 to limit upside. GBP/USD’s fall from 1.4376 is expected to resume later. On the downside, break of 1.3101 will target 61.8% retracement of 1.1946 to 1.4376 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 1.3490) holds, even in case of strong rebound.