GBP/USD Mid-Day Outlook

Daily Pivots: (S1) 1.6393; (P) 1.6468; (R1) 1.6554; More

Intraday bias in GBP/USD remains on the downside with focus on 1.6232 support. As noted before, break there will be an early signal that GBP/USD has topped out already, with bearish divergence conditions in 4 hours MACD and RSI. Deeper decline should then be seen to 1.5801 support for confirmation. On the upside, above 1.6543 will turn intraday outlook neutral again and argue that another high above 1.6742 might be seen before GBP/USD tops.

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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