GBP/USD Daily Outlook

Daily Pivots: (S1) 1.4626; (P) 1.4811; (R1) 1.4910; More

GBP/USD weakens further to 1.4713 but recovers mildly. Nevertheless, intraday bias remains on the downside as long as 1.4900 minor resistance holds and further fall should be seen to retest 1.4557 low first. Break will confirm that recent decline from 1.6671 has resumed for 100% projection of 1.7630 to 1.5269 from 1.6671 at 1.4310 next. On the upside, however, above 1.4990 will turn intraday outlook neutral again and argues that consolidation from 1.4557 is still in progress for another rise above 1.5249 before completion. Though, even in such case, upside is expected to be limited by 1.5600 cluster resistance and bring down trend resumption.

In the bigger picture, there are some different interpretations of the structure of the whole down trend from 2.1161, with different projection targets. Main question is whether fall from 1.8668 is the fifth wave in the five wave sequence from 2.1161 (1.9337, 2.0158, 1.7445, 1.8668, ?) or it's the third wave inside the fall from 2.0158. In either case, fall from 1.8668 is possibly completing a five wave sequence of its own. Strong rebound from 1.4278/4310 cluster projection target (100% projection of 1.7630 to 1.5269 from 1.6671 at 1.4310, 161.8% projection of 2.0158 to 1.7445 from 1.8668 at 1.4278), followed by break of 1.5600 resistance will suggests that a medium term bottom is formed and bring larger scale correction. Though, sustained trading below 1.4278/4310 will target 1.3680 key long term support (01 low).

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