GBP/USD Mid-Day Outlook

Daily Pivots: (S1) 1.6974; (P) 1.7185; (R1) 1.7303; More

GBP/USD rebounds stronger after diving to as low as 1.6786 earlier today. Break of 1.7078 minor resistance indicates that an intraday low is in place. Some sideway trading could now be seen. Nevertheless, consolidation should be relatively brief as long as 1.7398 resistance holds. Below 1.6786 will bring decline to next target of 61.8% retracement of 1.3680 to 2.1161 at 1.6538.

In the bigger picture, a long term top is in place at 2.1161 and down trend from there is still in progress. Next medium term target is 61.8% retracement of 1.3680 to 2.1161 at 1.6538. The impulsive nature and the scale of the fall from 2.1161 also provides strong evidence to the case of the start of a long term down trend. Sustained break of 1.6538 will target 1.3681 (01 low). On the upside, above 1.8668 resistance is need to confirm that a medium term bottom is formed. Otherwise, outlook will remain bearish and further decline is still expected even in case of stronger than expected rebound.

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