Daily Technical Outlook on Major - GBP/USD

Trend Daily Chart
Down

Daily Indicators
Bullish divergences

21 HR EMA
1.2736

55 HR EMA
1.2719

Trend Hourly Chart
Sideways

Hourly Indicators
Bearish divergences

13 HR RSI
54

14 HR DMI

+ve
Daily Analysis
Consolidation b4 one more rise

Resistance
1.2815 - May 21 high
1.2792 - 80.9% proj. of 1.2543-1.2727 fm 1.2643
1.2766 - Y'day's 4-week high

Support
1.2708 - Mon's low
1.2690 - Prev. hourly res (now sup)
1.2643 - Last Fri's low

• GBP/USD - 1.2741... Although cable continued Fri's ascent n briefly penetrated previous Jun's 1.2763 high to 1.2766 at European open y'day, profit taking knocked price down to 1.2708 in NY morning b4 rebounding on usd's weakness.

• 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 confirms major low has been made. Sterling's fall 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 1.2559 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. Having said that, last week's rise fm a 5-1/2 month low at 1.2507 to 1.2766 y'day signals temporary bottom is made n abv 1.2815 may head twd 1.2945 (50% r of 1.3383-1.2507).

• Today, cable's rally fm last Tue's trough at 1.2507 to 1.2766 y'day confirms recent decline has made a temp. low n stronger retracement to 1.2790 is likely, however, 'bearish divergences on hourly indicators should cap price at 1.2815. Only below 1.2690/00 signals temporary top is made, risks 1.2643/48.

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