Daily Pivots: (S1) 1.3290; (P) 1.3336; (R1) 1.3363; More….
GBP/USD’s rebound was limited at 1.3382 and weakens sharply. Loss of momentum and break of 1.3278 minor support revive the case that price actions from 1.3026 are merely a correction. Intraday bias is turned back to the downside and sustained trading below 4 hour 55 EMA will pave the way to retest 1.3026 low. Above 1.3382 resistance will target 61.8% retracement of 1.3651 to 1.3026 at 1.3412 instead.
In the bigger picture, as noted before, GBP/USD hit strong resistance from the long term falling trend line. Nonetheless, subsequent fall was contained by 55 week EMA (now at 1.3069). Outlook is a bit mixed. For the moment, as long as 1.3835 support turned resistance holds, medium term rise from 1.1946 are viewed as a corrective pattern. That is, we’d expect another leg in the long term down trend through 1.1946 low. However, sustained break of 1.3835 should at least send GBP/USD to 38.2% retracement of 2.1161 (2007 high) to 1.1946 (2016 low) at 1.5466.