GBP/USD Daily Outlook

Daily Pivots: (S1) 1.6336; (P) 1.6540; (R1) 1.6658; More

Intraday outlook in GBP/USD was turned neutral after the sharp fall from 1.6742. Focus now turns to 1.6232 support and break there is needed to indicate that GBP/USD has topped out. Otherwise, another rise is still mildly in favor. Break of 1.6742 will target 61.8% projection of 1.4395 to 1.6661 from 1.5801 at 1.7201. But again, upside momentum is expected to diminish as GBP/USD approaches this level and finally bring reversal. On the downside, break of 1.6232 will in turn be an early signal that GBP.USD has topped out already and will turn focus to 1.5801 support for confirmation.

In the bigger picture, rise from 1.3654 is treated as the third leg of the correction that started at 1.3503, which correct the larger down trend from 2.1161. Such rally from 1.3654 should be in the last stage after meeting target zone of 1.6428/7332 (38.2% and 50% retracement of 2.1161 to 1.3503). Focus will remain on reversal signal as we'd expect the whole correction from 1.3503 to conclude here. On the downside, firm break of 1.6232 support will now be an important signal that the whole correction has finally completed and will turn focus to next key support of 1.5801 for confirmation.

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