GBP/USD Weekly Outlook

GBP/USD’s decline last week argues that rebound from 1.3601 has completed at 1.3912 already. Immediate focus is on 1.3725 support this week. Firm break there will confirm would likely resume the fall from 1.4248 to 1.3482 resistance turned support next. On the upside, through, above 1.3912 will target 1.3982 resistance instead.

In the bigger picture, as long as 1.3482 resistance turned support holds, we’d still treat price actions from 1.4248 as a corrective move. That is, up trend from 1.1409 (2020 low) is in favor to resume. Decisive break of 1.4376 key resistance (2018 high) would indeed carry long term bullish implications. However, sustained break of 1.3482 will at least bring deeper fall to 38.2% retracement of 1.1409 to 1.4248 at 1.3164, or even further to 61.8% retracement at 1.2493.

In the longer term picture, a long term bottom should be in place at 1.1409, on bullish convergence condition in monthly MACD. Rise from there would target 38.2% retracement of 2.1161 to 1.1409 at 1.5134. Reaction from there would reveal whether rise from 1.1409 is just a correction, or developing into a long term up trend.

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