GBP/USD: Deeper Drop Is Possible
Trading tone is neutral, with focus on resistance turned support 1.3042. The corrective growth from 1.2661 could have completed at 1.3297, ahead of key fibonacci level 1.3316. Pivot points are at: (S1) 1.3040; (P) 1.3114; (R1) 1.3153.
Break of resistance turned support 1.3042 will bring deeper drop to 1.2784. Hitting of 1.2784 will argue that larger downtrend from 1.4376 is resuming for a new low below 1.2661.
A medium term bounce from 1.1946 should have completed at 1.4376 already, after rejection from 55 month EMA (now at 1.4062). Overcoming of 1.3316 would bring stronger rebound to 61.8% retracement at 1.3721. Downtrend resumption is forecast. This will be the preferred case while 38.2% retracement of 1.4376 to 1.2661 at 1.3316 keeps.