GBP/USD Daily Outlook

Daily Pivots: (S1) 1.6393; (P) 1.6468; (R1) 1.6554; More

GBP/USD's fall from 1.6742 resumes today and at this point, intraday bias remains mildly on the downside and further fall could be seen to 1.6232 support. But after all, as long as this support holds, there is no clear indication of topping in GBP/USD yet. Strong rebound from there, followed by break of 1.6543 minor resistance will flip intraday bias back to the upside for a retest of 1.6742 high first. Break will bring up trend resumption to 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, with bearish divergence conditions in 4 hours MACD and RSI 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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