Daily Pivots: (S1) 1.3720; (P) 1.3755; (R1) 1.3799; More…
GBP/USD’s decline continues today and reaches as low as 1.3654 so far. The break of 1.3711 key support indicates medium term reversal. That is, whole rally from 1.1946 has completed. Intraday bias remains on the downside for 1.3448 fibonacci level next. On the upside, break of 1.3791 resistance is needed to be the first sign of short term bottoming. Otherwise, outlook will remain bearish even in case of recovery.
In the bigger picture, bearish divergence condition in daily MACD is raising the chance of medium term reversal. Also, note that GBP/USD has just failed to sustain above 55 month EMA (now at 1.4248) again. Focus is back on 1.3711 support. Firm break there will confirm medium term reversal and target 38.2% retracement of 1.1936 (2016 low) to 1.4376 at 1.3448 first. Break will target 61.8% retracement at 1.2874 and below. For now, sustained break of 55 month EMA is needed to confirm medium term upside momentum. Otherwise, we won’t turn bullish even in case of strong rebound.
