GBP/USD Mid-Day Outlook

Daily Pivots: (S1) 1.2948; (P) 1.2995; (R1) 1.3067; More…

GBP/USD’s rebound from 1.2921 extends today but it’s limited below 1.3115 minor resistance Intraday bias stays neutral first. On the downside, break of 1.2921 will reaffirm the view that corrective rise from 1.2661 has completed. Intraday bias will be turned to the downside for 1.2784 support next. On the upside, however, break of 1.3115 will dampen our view and turn bias to the upside for 1.3297 to extend the corrective rise from 1.2661.

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 1.4062). The structure and momentum of the fall from 1.4376 argues that it’s resuming long term down trend. And this will be the preferred case as long as 38.2% retracement of 1.4376 to 1.2661 at 1.3316 holds. However, firm break of 1.3316 would bring stronger rebound to 61.8% retracement at 1.3721. And, the eventual depth of the fall from 1.4376, and the chance of hitting 1.1946 low, will depend on the strength of the interim corrective rebound from 1.2661.