GBP/USD Daily Forecast

Daily Pivots: (S1) 1.5822; (P) 1.5945; (R1) 1.6024;

GBP/USD's down trend resumes after brief consolidations and reaches as low as 1.5864 so far. At this point, short term outlook will remain bearish as long as 1.6064 resistance holds and GBP/USD is expected to fall further to 1.5706 cluster support next (38.2% retracement of 1.3503 to 1.7043 at 1.5691). On the upside, though, break of 1.6064 will indicate that a short term bottom is formed, possibly with bullish convergence conditions in 4 hours MACD and stronger rebound should then be seen.

In the bigger picture, we're still favoring the bearish case that medium term rebound from 1.3503, which is is treated as a correction to down trend from 2.1161, has completed at 1.7043. Focus now turns to 1.5706 cluster support (38.2% retracement of 1.3503 to 1.7043 at 1.5691) for confirmation. Break there will argue that whole down trend form 2.1161 is likely resuming for a new low below 1.3503.

On the upside, break of 1.6408 resistance will indicate that fall from 1.6875 has completed and GBP/USD is still bounded in medium term range of 1.5706/7043. In other words, whole medium term rise from 1.3503 might not be finished yet and another rise could still be seen to 1.7332/8236 (50% and 61.8% retracement of 2.1161 to 1.3503) before completion.

Based on ActionForex.com Technical Outlook