Daily Pivots: (S1) 1.3899; (P) 1.3965; (R1) 1.4004; More…
Despite dipping to 1.3894, GBP/USD quickly recovered with 4 hour MACD staying above signal line. Intraday bias remains neutral for more consolidative trading. Upside of recovery should be limited by 1.4089 minor resistance to bring fall resumption. Below 1.3894 will target 1.3711 key support next. However, firm break of 1.4089 will turn focus back to 1.4376 high instead.
In the bigger picture, bearish divergence condition in daily MACD is raising the chance of medium term reversal. Also, note that GBP/USD has just failed to sustain above 55 month EMA (now at 1.4257). Focus is back on 1.3711 support. Firm break there will confirm medium term reversal and target 38.2% retracement of 1.1936 (2016 low) to 1.4376 at 1.3448 first. Break will target 61.8% retracement at 1.2874 and below. For now, sustained break of 55 month EMA is needed to confirm medium term upside momentum. Otherwise, we won’t turn bullish even in case of strong rebound.
