GBPUSD Outlook | Written by ActionForex.com
GBP/USD rebounded strongly after initial dip to 1.5484. While the rebound is still kept below 1.5838 resistance, the broad based weakness in dollar is making the bearish view in GBP/USD vulnerable. In any case, initial bias remains on the upside this week for further rise. Break of 1.5838 resistance will argue that whole decline from 1.6298 is completed at 1.5484 already. In such case, stronger rise would be seen to 1.6093 resistance first. On the downside, below 1.5666 minor support will turn intraday bias neutral first. But we'll stay neutral unless there is a break of 1.5484 or evidence of strength in dollar elsewhere.
In the bigger picture, price actions from 1.3503 (2009 low) are treated as as consolidation to long term down trend from 2007 high of 2.1161. Rise from 1.4230 is treated as the third leg of such consolidation and with 1.5296 support intact, such rise could still continue for 1.7043 resistance. But after all, strong resistance should be seen between 1.7043 and 50% retracement of 2.1161 to 1.3503 at 1.7332 to limit upside. On the downside, break of 1.4230 support will be the first signal of down trend resumption and will turn focus to 1.3503 low for confirmation.
In the longer term picture, the corrective nature of the multi-decade advance from 1.0463 (85 low) to 2.1161 as well as the impulsive nature of the fall from there suggests that GBP/USD is now in an early stage of a long term down trend. Another low below 1.3503 is anticipated after rebound from 1.3503 is confirmed to be completed.
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