GBP/USD Mid-Day Outlook

Daily Pivots: (S1) 1.3176; (P) 1.3240; (R1) 1.3287; More…

GBP/USD dips notably today but stays above 1.3101 temporary low. Intraday bias remains neutral first. Above 1.3314 will bring another recovery. But we’d expect strong resistance from 1.3471 to limit upside to bring decline resumption. On the downside, break of 1.3101 will resume fall from 1.4376 and 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 1.3471 resistance holds, even in case of strong rebound.