Daily Pivots: (S1) 1.3737; (P) 1.3777; (R1) 1.3833; More…..
A temporary top is in place at 1.3819 and intraday bias in GBP/USD is turned neutral first. At this point, we’d still expect strong resistance from 1.3835 to limit upside to complete the medium term rally from 1.1946. However, sustained break there will carry larger bullish implication and target long term fibonacci level at 1.5466. On the downside, firm break of 1.3457 support should confirm reversal.
In the bigger picture, the break of long term trend line resistance from 1.7190 (2014 high) is seen as a sign of long term reversal. However, rise from 1.1946 (2016 low) is not impulsive looking. And the pair is limited below 1.3835 key resistance. Hence, we won’t turn bullish yet and would continue to monitor the development. On the downside, break of 1.3038 support will now indicate that rebound from 1.1946 has completed and turn outlook bearish. Meanwhile, 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.
