GBPUSD Outlook | Written by ActionForex.com
GBP/USD edged higher to 1.5860 last week and broke near term falling trend line as well as 1.5838 resistance. Upside momentum is not too convincing still. But after all, another rise remains in favor as long as 1.5655 minor support holds. Fall from 1.6298 is likely finished with three waves down to 1.5484 already. Rebound from there should target 1.6093 first and then another high above 1.6298. On the downside, though,below 1.5655 will flip intraday bias back to the downside and turn focus back to 1.5484 low.
In the bigger picture, price actions from 1.3503 (2009 low) are treated 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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