Daily Pivots: (S1) 1.3820; (P) 1.3907; (R1) 1.3967; More…..
GBP/USD recovers strongly on hawkish BoE. Break of 1.3999 minor resistance indicates temporary bottoming at 1.3835. Intraday bias is turned neutral first. At this point, it’s still unsure whether decline from 1.4345 is correcting rise from 1.3038, or that from 1.1946, or it’s reversing the trend. Below 1.3835 will target 1.3651 resistance turned support first. On the upside, break of 1.4345 is needed to confirm rally resumption. Otherwise, we’d expect more corrective trading with risk of at least another decline.
In the bigger picture, sustained break of 1.3835 key resistance level indicates that rebound from 1.1946 is at least correcting the long term down from from 2007 high at 2.1161. Further rise should now be seen back to 38.2% retracement of 2.1161 (2007 high) to 1.1946 (2016 low) at 1.5466. Medium term outlook will stay bullish 38.2% retracement of 1.1946 to 1.4345 at 1.3429, in case of deep pull back.