GBP/USD Mid-Day Outlook

Daily Pivots: (S1) 1.3113; (P) 1.3185; (R1) 1.3225; More…

We’re holding on to the view that rebound from 1.2921 has completed at 1.3257 already. Deeper fall is in favor to 1.2921 support first. Break there will resume the fall from 1.3297 and target 1.2661/2784 support zone. On the upside, in case of another rally, we’d continue to expect strong resistance at 1.3316 key fibonacci level to bring down trend resumption eventually.

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. 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.