GBP/USD Daily Outlook

Daily Pivots: (S1) 1.5601; (P) 1.6000; (R1) 1.6219; More

GBP/USD's fall from 1.6671 extends further to as low as 1.5603 today and at this point, intraday bias remains on the downside as long as 1.5880 minor resistance holds. Further fall is expected to retest 1.5269 low first. On the upside, above 1.6405 minor 1.5880 minor resistance will turn intraday outlook neutral again. But another fall is still in favor as long as upside is limited below 1.6405 resistance. Above there, though will indicate that rebound from 1.5269 has resumed for 1.6786 support turned resistance.

In the bigger picture, while rebound from 1.5269 is strong, there is no confirmation of a medium term bottom yet. 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 and a new low should be made before making a medium term bottom. However, above 1.6786 will indicate that fall from 1.8668 has possibly completed. It will also 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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