Daily Pivots: (S1) 1.2904; (P) 1.2969; (R1) 1.3092; More…
GBP/USD’s rebound from 1.2661 extended to as high as 1.3038 so far and intraday bias stays on the upside. Current development suggests medium term bottoming at 1.2661, on bullish convergence condition in daily MACD. Further rise should be seen to 55 day EMA (now at 1.3058) and then 1.3212 resistance. For now, we’d expect strong resistance from 1.3316 fibonacci level to limit upside, at least on first attempt. On the downside, break of 1.2844 support will argue that the rebound is completed and bring retest of 1.2661 low.
In the bigger picture, whole medium term rebound from 1.1946 (2016 low) should have completed at 1.4376 already, after rejection from 55 month EMA (now at 1.4091). The structure and momentum of the fall from 1.4376 argues that it’s resuming long term down trend. And this will be the preferred case as long as 38.2% retracement of 1.4376 to 1.2661 at 1.3316 holds. However, firm break of 1.3316 would bring stronger rebound to 61.8% retracement at 1.3721. And, the eventual depth of the fall from 1.4376, and the chance of hitting 1.1946 low, will depend on the strength of the interim corrective rebound from 1.2661.
