GBP/USD Daily Forecast

Daily Pivots: (S1) 1.6525; (P) 1.6581; (R1) 1.6677;

GBP/USD's rally resumes after brief pull back and reaches as high as 1.6685 so far. At this point, intraday bias will remain on the upside as long as 1.6486 minor support holds. Further rise should be seen to 1.6740 resistance first. Nevertheless, considering mild bearish divergence conditions in 4 hours MACD and RSI, upside might be limited there initial and bring retreat. Below 1.6486 will indicate that an intraday top is in place and bring consolidations. Nevertheless, note that strong break of 1.6740 will confirm that whole fall from 1.7043 has completed and will pave the way to retest 1.7043 high.

In the bigger picture, the strong break of falling trend line resistance dampens the bearish view in GBP/USD. Fall from 1.7043 might have completed with three waves down to 1.5076 already, after missing 38.2% retracement of 1.3503 to 1.7043 at 1.5691. The three wave structure argues that it might be a correction to medium term rebound from 1.3503 only. In other words, another high above 1.7043 should be seen before GBP/USD tops out. A break of 1.6740 resistance will add some more credence to this case and bring retest of 1.7043 first.

Based on ActionForex.com Technical Outlook