GBP/USD Mid-Day Outlook (update)

Daily Pivots: (S1) 1.2844; (P) 1.2888; (R1) 1.2914; More…

GBP/USD surges to as high as 1.2982 as rebound from 1.2661 resumes. Break of 1.2956 support turned resistance also suggests medium term bottoming at 1.2661, on bullish convergence condition in daily MACD. Intraday bias is back on the upside for 55 day EMA (now at 1.3054) and above. For now, we’d expect strong resistance from 1.3316 fibonacci level to limit upside, at least on first attempt. On the downside, break of 1.2844 support will argue that the rebound is completed and bring retest of 1.2661 low.

In the bigger picture, whole medium term rebound from 1.1946 (2016 low) should have completed at 1.4376 already, after rejection from 55 month EMA (now at 1.4091). Current downside acceleration argues that it’s possibly resuming long term down trend. In any case, outlook will stay bearish as long as 38.2% retracement of 1.4376 to 1.2661 at 1.3316 holds. Retest of 1.1946 should be seen next.