GBP/USD Weekly Outlook

GBP/USD dropped to 1.2588 last week and breached 1.2614 key support level but recovered. Upside of rebound was limited below 1.2813 resistance and outlook is unchanged. Initial bias remains neutral this week first. At this point, we still favor the case that consolidation pattern from 1.1946 has completed at 1.3047 already. Sustained break of 1.2614 should confirm our bearish view and target a test on 1.1946 low next. However, break of 1.2813 resistance will dampen our view and turn bias back to the upside for 1.3047 and above.

In the bigger picture, fall from 1.7190 is seen as part of the down trend from 2.1161. Price actions from 1.1946 medium term low are seen as a consolidation pattern, which could have completed at 1.3047 after hitting 55 week EMA. Break of 1.1946 low will target 61.8% projection of 1.5016 to 1.1946 from 1.3047 at 1.1150 next. In case the consolidation from 1.1946 extends, outlook will stay remain bearish as long as 1.3444 resistance holds.

In the longer term picture, no change in the view that down trend from 2.1161 is still in progress. On resumption, such decline would extend deeper to 100% projection of 2.1161 to 1.3503 from 1.7190 at 0.9532.

GBP/USD 4 Hours Chart

GBP/USD Daily Chart

GBP/USD Weekly Chart

GBP/USD Monthly Chart

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