GBP/USD Mid-Day Outlook

Daily Pivots: (S1) 1.9664; (P) 1.9745; (R1) 1.9842; More

Cable continues to engage in choppy trading between 1.9647 and 1.9785. With an intraday low in place, outlook remains neutral. Above 1.9785 again will flip intraday bias back to the upside for 2.0006 resistance. Break will indicate that rise from 1.9408 has resumed. As discussed before, rise from 1.9363 represents another rising leg of the consolidation pattern that started at 1.9337 and might extend further to retest 2.0391 to completion the consolidation. Next near term target is 161.8% projection of 1.9363 to 1.9852 from 1.9408 at 2.0199 first. On the downside, while another fall to 61.8% retracement of 1.9408 to 2.0006 at 1.9636 cannot be ruled out, downside should be contained well above 1.9586 support and bring another rally.

In the bigger picture, down trend from 2.1161 have made a low at 1.9337. The corrective nature of the rise from 1.9337 to 2.0391 and fall from 2.0391 to 1.9363 suggests that price actions from 1.9337 are developing into sideway consolidation to whole fall from 2.1161. Though, the structure and length of this consolidation could either be in form of a three wave sideway consolidation or in form of five wave triangle pattern. But in either case, another rise is still expected to test 2.0391 resistance. Nevertheless upside of such consolidation should still be limited by 61.8% retracement of 2.1161 to 1.9337 at 2.0464. On the downside, though, below 1.9586 support will be the first signal that the final rise in the consolidation pattern has completed. Sustained break of 1.9337/63 support zone will indicate that decline from 2.1161 has resumed.

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