GBP/USD Mid-Day Outlook

Daily Pivots: (S1) 1.3043; (P) 1.3085; (R1) 1.3119; More…

GBP/USD formed a temporary low at 1.3048 with today’s recovery. Intraday bias is turned neutral for consolidation. Upside should be limited by 1.3314 resistance to bring fall resumption. Below 1.3048 will resume whole decline from 1.4376. Next target is 61.8% retracement of 1.1946 to 1.4376 at 1.2875 first. Break there will target 61.8% projection of 1.4376 to 1.3101 from 1.3471 at 1.2683.

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.