GBP/USD Mid-Day Outlook

Daily Pivots: (S1) 1.6128; (P) 1.6236; (R1) 1.6320; More

Intraday bias in GBP/USD remains mildly on the downside with 1.6226 minor resistance intact. Break of 1.5983 will confirm whole fall from 1.6742 has resumed for key medium term trend line support at 1.5776. On the upside, above 1.6226 will turn intraday outlook neutral again and indicate that consolidation from 1.5983 is still in progress. In such case, another rise might be seen but after all, upside is expected to be limited below 1.6742 high and bring fall resumption.

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. With up trend in daily MACD firmly broken, we're tentatively treating such correction as completed at 1.6742. This is supported by the fact that target zone of 1.6428/7332 (38.2% and 50% retracement of 2.1161 to 1.3503) was already met. Sustained trading below mentioned medium term trend line support (now at 1.5776) will confirm this case and will target a retest of 1.3503 low then.

On the upside, above 1.6742 will invalidate this view and indicate that rise from 1.3503 is still in progress. But after all, focus will remain on reversal signal as we'd expect the whole correction from 1.3503 to conclude inside this 1.6428/7332 area.

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