GBP/USD Weekly Outlook

GBP/USD’s rise from 1.3038 extended higher last week and breached 1.3337 resistance. Initial bias is now on the upside this week for 61.8% retracement of 1.3651 to 1.3026 at 1.3412. Sustained break there will pave the way to retest 1.3651 high. Nonetheless, rejection from 1.3412, or break of 1.3278 minor support will revive the case that price actions from 1.3026 are merely correction. And intraday bias will be turned back to the downside for 1.3026 low in that case.

In the bigger picture, as noted before, GBP/USD hit strong resistance from the long term falling trend line. Nonetheless, subsequent fall was contained by 55 week EMA (now at 1.3069). Outlook is a bit mixed. For the moment, as long as 1.3835 support turned resistance holds, medium term rise from 1.1946 are viewed as a corrective pattern. That is, we’d expect another leg in the long term down trend through 1.1946 low. However, sustained break of 1.3835 should at least send GBP/USD to 38.2% retracement of 2.1161 (2007 high) to 1.1946 (2016 low) at 1.5466.

In the longer term picture, long the outlook is turned a bit mixed as GBP/USD failed to break through falling tend line resistance. We’ll stay neutral first and assess the outlook again and price actions unfold.

GBP/USD 4 Hours Chart

GBP/USD Daily Chart

GBP/USD Weekly Chart

GBP/USD Monthly Chart

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