GBP/USD Daily Outlook

Daily Pivots: (S1) 1.5550; (P) 1.5753; (R1) 1.6107; More

GBP/USD's consolidation from 1.5269 is still in progress and recovers further to 1.6217 today. At this point, intraday bias remains mildly on the upside as long as 1.5753 minor support holds and further recovery could be seen to 4 hours 55 EMA (now at 1.6322) 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. Below 1.5753 will flip intraday bias back to the downside for 1.5269 low first.

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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