GBP/USD Mid-Day Outlook

Daily Pivots: (S1) 1.7152; (P) 1.7378; (R1) 1.7490; More

As discussed before, rebound from 1.6786 has likely complete after GBP/USD took out 1.7259 minor support. At this point, intraday bias remains on the downside for retest of 1.6786 low. Break will confirm that fall from 1.8668 has resumed for 61.8% retracement of 1.3680 to 2.1161 at 1.6538. On the upside, above 1.7602 will indicate that rebound from 1.6786 is still in progress for 1.7843 resistance.

In the bigger picture, GBP/USD is at a juncture now. A discussed before, down trend from 2.1161 is in form of a five wave decline. Prior break of 1.7398 resistance serve as the first alert that the fifth wave has completed. Further break of 1.7843 will add more credence to this case and have medium term outlook turned neutral and expect some consolidation between 1.6786 and 1.8668 before resuming the long term down trend. Nevertheless, upside of the consolidation should be limited by 1.8668 resistance.

On the downside, though, failure below 1.7843 will indicate that 1.6786 is not the medium term bottom yet. In such case, down trend from 2.1161 is still expected to extend further to next medium term target is 61.8% retracement of 1.3680 to 2.1161 at 1.6538 before making a bottom.

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