Daily Pivots: (S1) 1.3826; (P) 1.3877; (R1) 1.3939; More….
While GBP/USD’s recovery from 1.3711 extends, there is no sign of pick up in momentum. The pair is also bounded inside near term falling channel. Such rebound is viewed as a corrective move and intraday bias stays neutral, with mild bearish near term outlook. On the downside, break of 1.3711 will extend the fall from 1.4345 through 1.3651 resistance turned support. We’ll look for strong support from 38.2% retracement of 1.1946 to 1.4345 at 1.3429 to contain downside and bring rebound. This will be the preferred case as long as 1.4144 resistance holds.
In the bigger picture, as long as 1.3038 support holds, medium term outlook in GBP/USD will remains bullish. Rise from 1.1946 is at least correcting the long term down from 2007 high at 2.1161. Further rally would be seen back to 38.2% retracement of 2.1161 (2007 high) to 1.1946 (2016 low) at 1.5466. However, GBP/USD fails to sustain above 55 month EMA (now at 1.4259) so far. Break of 1.3038 support, will suggest that rise from 1.1946 has completed and will turn outlook bearish for retesting this low.