GBPUSD Outlook | Written by ActionForex.com | Nov 09 13 03:50 GMT
GBP/USD continued to stay in range of 1.5894/6259 last week. Initial bias remains neutral first. Overall outlook is unchanged. In case of another rise through 1.6259, we'd expect strong resistance from 1.6380 to bring reversal eventually. On the downside, break of 1.5903 should now confirm topping and turn near term outlook bearish and should target 1.5751 resistance turned support first.
In the bigger picture, price actions from 1.3503 (2009 low) are treated as consolidations to long term down trend from 2.1161. Current development suggests that it's still in progress. It's possible that rise from 1.4813 is the fifth leg of a triangle pattern and in that case, we should see strong resistance below 1.6380 to limit upside and bring down trend resumption finally. Meanwhile, break of 1.6380 will indicate that rise from 1.4813 is the third leg of the consolidation pattern and should target 1.7043 instead.
In the longer term picture, the complicated triangle pattern from 1.3503 argues that it's the fourth wave of the five wave sequence from 2.1161. That means, firstly, 1.3503 shouldn't be the end point of the downtrend yet and a new low is expected. However, secondly, as the next fall could be the fifth wave, the breach of 1.3503 could be shallow and brief from long term point of view and we'll then see a more sustainable rebound.
