GBP/USD Mid-Day Outlook

Daily Pivots: (S1) 1.6467; (P) 1.6526; (R1) 1.6626; More

GBP/USD retreats sharply after rising to 1.6742 earlier today and break of 1.6540 minor support indicates that an intraday top is in place. Intraday outlook is turned neutral for the moment and some more pull back cannot be ruled out. But after note, note that prior break of 1.6661 high indicates that medium term rally has resumed and hence, break of 1.6232 support is needed to indicate that GBP/USD has topped out. Otherwise, short term outlook remains bullish. Above 1.6742 will target 61.8% projection of 1.4395 to 1.6661 from 1.5801 at 1.7201. But upside momentum is expected to diminish as GBP/USD approaches this level and finally bring reversal.

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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