GBP/USD Daily Outlook

Daily Pivots: (S1) 1.5345; (P) 1.5835; (R1) 1.6407; More

GBP/USD's recovery from 1.5269 was limited below mentioned 1.6041 minor resistance and fall from 1.7630 should still be in progress. Intraday bias remains on the downside and break of 1.5269 will bring deeper fall to 161.8% projection of 1.8668 to 1.6786 from 1.7630 at 1.4585. On the upside, touching 1.6041 will indicate that a short term bottom is in place and bring consolidation, with risk of stronger rebound. Nevertheless, upside should be limited below 1.6786 support turned resistance and bring one more fall to a new low to complete the five wave decline from 1.8668.

In the bigger picture, the down trend from 2.1161 is still in progress. There is no sign of a medium term bottom yet even though 76.4% retracement at 1.5446 is met. There are some different interpretations of the structure of the whole down trend from 2.1161, with different projection targets. The most bearish case is that fall from 2.0158 is the third wave in whole fall from 2.1161 while fall from 1.8668 is the third wave of the fall from 2.0158. In other words, GBP/USD is just in the middle of the whole down trend from 2.1161. The least bearish case is that the fall from 1.8668 is the fifth wave of the whole five wave decline from 2.1161 and is nearing an end.

Nevertheless, in any case, the fall from 1.8668 needs to complete a five wave structure before considering that a medium term bottom is formed. Having said that, medium term outlook will remain bearish as long as 1.6786 support turned resistance holds. Above 1.6786 will be the first alert that a medium term bottom is in place and break of 1.7630 will confirm. In such case, some large scale consolidations will follow.

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