GBP/USD Mid-Day Outlook

GBP/USD dived to as low as 1.5849 earlier today and met mentioned target of 1.5896 cluster support. At this point, intraday bias remains on the downside and further fall should be seen to 1.5829 next. Break there will confirm the whole fall from 1.6875 has resumed for 1.5706 key cluster support. On the upside, above 1.5979 minor resistance will turn intraday bias neutral first and bring consolidations. But recovery should be limited below 1.6274 resistance and bring fall resumption.

In the bigger picture, we're still favoring the bearish case that medium term rebound from 1.3503, which is treated as a correction to down trend from 2.1161, has completed at 1.7043. Firm break of 1.5706 cluster support (38.2% retracement of 1.3503 to 1.7043 at 1.5691) will confirm this case and indicate that whole down trend from 2.1161 is likely resuming for a new low below 1.3503. However, note that break of 1.6456 resistance will in turn shift favor to the case that recent price actions from 1.7043 are merely developing into consolidations to the larger rise from 1.3503. That is, 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.