GBP/USD’s rally accelerated further to as high as 1.3170 last week. As a temporary top is in place, initial bias is neutral this week first. On the upside, break of 1.3170 will resume the rise from 1.1409 to 100% projection of 1.1409 to 1.2647 from 1.2065 at 1.3303. On the downside, below 1.3013 minor support will turn bias to the downside for deeper pull back. But downside should be contained by 1.2813 resistance turned support to bring another rally.

In the bigger picture, while the rebound from 1.1409 is strong, there is not enough evidence for trend reversal yet. Down trend from 2.1161 (2007 high) should still resume sooner or later. However, decisive break of 1.3514 should at least confirm medium term bottoming and turn outlook bullish for 1.4376 resistance first.

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In the longer term picture, long term outlook remains clearly bearish, as it’s held well below long term falling trend line that started back at 2116 (2007 high). Prior rejections by 55 month EMA also affirmed bearishness. Further fall is expected as long as 1.3514 resistance holds.

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