GBP/USD Daily Outlook

Daily Pivots: (S1) 1.8222; (P) 1.8311; (R1) 1.8384; More

Cable continues to crawl lower to 1.8240 today but there is no decisive selling to get rid of 1.8303/34 support zone yet. Nevertheless, intraday bias remains on the downside as long as 1.8488 minor resistance holds. Sustained trading below 100% projection of 2.1161 to 1.9337 from 2.0158 at 1.8334 will encourage deeper fall to next target of 161.8% projection at 1.7207.

On the upside, above 1.8488 will turn intraday outlook neutral first. Also, further break of 1.8794 resistance will indicate that a short term low is finally in place, with bullish convergence condition in 4 hours MACD and RSI and bring stronger rebound. But upside should still be limited by 1.9337 support turned resistance and bring fall resumption.

In the bigger picture, medium term fall from 2.1161 (07 high) is still in progress. The developments so far are arguing that whole multi year up trend from 1.3680 (01 low) has also completed too. Those developments include strong break of the long term trend line and 55 months EMA, bearish divergence conditions and trend breaking in monthly MACD and RSI.

Focus is now on cluster support at 1.8303/34 (100% projection of 2.1161 to 1.9337 from 2.0158 at 1.8334 and 38.2% retracement of 1.3680 to 2.1161 at 1.8303). Sustained break of while which indicate that whole decline from 2.1161 is probably impulsive in nature and add more credence to the case of long term reversal. This will pave the way to next key support at 1.7047 first. On the upside, while strong rebound might be seen, a break of 2.0158 resistance is still needed to indicate fall from 2.1161 has completed. Otherwise, another fall should still be seen after correction.

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