Daily Pivots: (S1) 1.3066; (P) 1.3154; (R1) 1.3203; More…
GBP/USD drops to as low as 1.3104 so far and focus is now on 1.3101 support. Break will resume fall from 1.4376 and target 61.8% retracement of 1.1946 to 1.4376 at 1.2875 next. In case of another recovery, we’d continue to expect upside to be limited by 1.3471 resistance to bring decline resumption.
In the bigger picture, current development suggests that whole medium term rebound from 1.1936 (2016 low) has completed at 1.4376 already, with trend line broken firmly, on bearish divergence condition in daily MACD, after rejection from 55 month EMA (now at 1.4177). 61.8% retracement of 1.1936 (2016 low) to 1.4376 at 1.2874 is the next target. We’ll pay attention to the reaction from there to asses the chance of long term down trend resumption. For now, outlook will stay bearish as long as 1.3471 resistance holds, even in case of strong rebound.
