Daily Technical Outlook on Major - GBP/USD

Trend Daily Chart
Down

Daily Indicators
Bullish divergences

21 HR EMA
1.2620

55 HR EMA
1.2595

Trend Hourly Chart
Near term up

Hourly Indicators
Easing fm o/bot

13 HR RSI
75

14 HR DMI
+ve

Daily Analysis
Consolidation with upside bias

Resistance
1.2763 - Jun's high (Jun 07)
1.2708 - Last Thur's high
1.2674 - Y'day's high

Support
1.2634 - Reaction low fm 1.2674
1.2605 - Mon's high (now sup)
1.2569 - Y'day's Asian high (now sup)

• GBP/USD - 1.2671... Cable finally cut its recent losing streak on Wed n staged a rally fm 1.2543 at European open on broad-based short covering in sterling, the pound later climbed to as high as 1.2674 in post-FOMC NY trading.

• On the bigger picture, cable's rally fm 2016 31-year bottom at 1.1491 due to a 'flash crash' on Brexit worries to 2018 21-month peak at 1.4377 in Apr con- firms major low has been made. The subsequent fall to 1.2662 (Aug), then to a 20 -month bottom of 1.2412 at the start of Jan suggests downside bias remains. Despite erratic rise to 1.3383 in Mar, cable break of prev. May's 1.2605 low to 1.25 59 in May suggests re-test of 1.2412 would be seen, break needed to extend said fall fm 1.4377 to 1.2337 (70.7% r of 1.1491-1.4377) but 1.2340 should hold. On the upside, only abv 1.2815 confirms low has been made, then risk would shift to the upside for stronger gain to 1.2902, then 1.2994 (50% r fm 1.3383) in Jul.

• Today, cable's rally fm Tue's 5-1/2 month trough at 1.2507 to 1.2674 on Wed confirms recent decline has made a temp. low as this lvl was also accompanied by 'bullish convergences' on hourly indicators n stronger retrace. to 1.2708 is seen but 1.2763 should hold. Only below 1.2569 signals top, 1.2543, 1.2507.

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