GBP/USD Mid-Day Outlook

Daily Pivots: (S1) 1.7387; (P) 1.7876; (R1) 1.8203; More

GBP/USD finally catches up with other majors and dives to as low as 1.7344. Break of 1.7445 and long term fibo support of 1.7421 confirms that medium term down trend has resumed. At this point, intraday bias remains on the downside as long as 1.7512 minor resistance holds. Further decline should be seen to next short term target of 61.8% projection of 2.158 to 1.7445 from 1.8668 at 1.6991, which is close to 1.7 psychological support. On the upside, above 1.7512 will indicate that an intraday low is in place but recovery should be limited below 1.7841 resistance and bring another fall.

In the bigger picture, as mentioned before, the rebound from 1.7445, which is treated as correction to down trend from 2.1161 only, have completed after meeting target of 1.8512/8794 resistance zone and was limited below key near term resistance of 1.8794 (50% retracement of 2.0158 to 1.7445 at 1.8802). Medium term outlook remains unchanged. Fall from 2.1161 (07 high) is expected to developing into a five wave decline before making a medium term bottom. Sustained break of 1.7421/45 support zone will confirm that this fall has resumed for next target of 61.8% retracement of 1.3680 to 2.1161 at 1.6538 first. Break of 1.8668 resistance is needed before considering whether a medium term bottom is formed.

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