GBP/USD Daily Outlook

Daily Pivots: (S1) 1.5694; (P) 1.5768; (R1) 1.5895; More.
Intraday bias in GBP/USD remains on the upside for the moment and further rise should be seen to 1.5997 high. Break will confirm that whole rise form 1.4230 has resumed and should target 61.8% projection of 1.4230 to 1.5997 from 1.5296 at 1.6338 next. On the downside, below 1.5771 minor support will turn intraday bias neutral and bring consolidations. But short term outlook will remain bullish as long as 1.5503 support holds.
In the bigger picture, price actions from 1.3503 are viewed as consolidation to fall from 2.1161 only with rise from 1.4230 as the third leg. There is no clear indication that such consolidation is finished. Above 1.5996 will bring another rise to 1.7043 resistance and above. However, we'd expect strong resistance between 1.7043 and 50% retracement of 2.1161 to 1.3503 at 1.7332 and finally bring long term down trend resumption. In any case, a break of 1.4230 support will indicate that the consolidation is completed and down trend from 2.1161 is resuming for another low below 1.3503.

GBPUSD: Hesitating But Largely Biased To The Upside

In This Issue:

GBPUSD: Price hesitation may have set in after the pair broke and held above its range top at 1.5713 the past week…


GBPUSD: Hesitating But Largely Biased To The Upside.
GBPUSD: Price hesitation may have set in after the pair broke and held above its range top at 1.5713 the past week. However, while it continues to hold above the 1.5713 level, we are likely to see additional upside gains towards the 1.5996 level, its Aug 08’10 high with a cut through there targeting the 1.6214 level, its range pattern price target. While these levels may present considerable resistance on initial tests, an eventual break should push GBP further towards its Jan 17’10 high at 1.6456. Its weekly RSI is bullish and pointing higher supporting this view. Alternatively, we will reverse our view to consolidation if its present strength fades and turns it back below the 1.5713 level. This will pave the way for a run at the 1.5502 level with a violation of there allowing for further downside pressure towards the 1.5295 level, its Sept 07’10 low and next the 1.5122 level, its July 21’10 low.

GBPUSD Technical Major Currencies Report

Cable closed last week above neckline 1.5725, thus insuring that the bullish short term wave’s continuation; however, 61.8% Fibonacci correction stands as a vital barrier that will impede the pair’s ascend. The negativity of momentum indicators could pressure the pair towards a minor bearish correction that would retest the mentioned neckline before resuming the bullish trend for this week; targeting 1.6070 then 1.6255. Note that the breach of 1.5725 and building a base below it will weaken chances of the suggested bullish trend.

The trading range for today is among the key support at 1.5595 and the key resistance at 1.6255.

The short term trend is to the downside as far as 1.6070 remains intact with targets at 1.3800.

Support 1.5785 1.5725 1.5645 0.5605 1.5560
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Resistance 1.5870 1.5930 1.5960 1.6025 1.6070
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Recommendation Based on the charts and explanations above our opinion is buying the pair around 1.5725 targeting 1.5960 and stop loss below 1.5595, might be appropriate.