GBP/USD Mid-Day Outlook

Daily Pivots: (S1) 1.2770; (P) 1.2845; (R1) 1.2893; More…

Intraday bias in GBP/USD remains neutral for consolidation above 1.2777 temporary low. As long as 1.2919 minor resistance holds, further decline is expected. On the downside, break of 1.2777 will resume the fall from 1.3297 and target 1.2661 low first. Decisive break there will resume larger down trend from 1.4376. Next target is 61.8% projection of 1.4376 to 1.2661 from 1.3297 at 1.2237. On the upside, break of 1.2919 minor resistance will suggest short term bottoming and turn bias to the upside for stronger rebound.

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.