Daily Pivots: (S1) 1.2703; (P) 1.2765; (R1) 1.2803; More

GBP/USD formed a temporary low at 1.2725, ahead of 1.2723 support and recovered. Intraday bias is turned neutral again. On the upside, above 1.2927 resistance will bring stronger rebound to 1.3071 and possibly above. On the downside, break of 1.2725 should extend recent fall to retest 1.2661 key support. After all, price actions from 1.2661 are viewed as a consolidation pattern. Even in case of strong rebound, upside should be limited by 1.3316 fibonacci level to bring down trend resumption eventually.

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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. 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.

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