Technical outlook:
GBP/USD continues to drop. It printed a low at 1.3072 yesterday, just shy of the initial support at 1.3050 respectively. This was in line with our expectations, after having touched 1.3515 last week. Please watch out for 1.3010/1.2990 levels for intraday support and bounce; also short positions opened earlier can be taken off the desk if prices reach 1.2930 levels. If a meaningful top is in place at 1.3515 levels, the GBP/USD pair would continue to drift lower towards 1.2820 and further through 1.2740 levels respectively. Also note that the potential remains for a dip all through fibonacci 0.618 support/retracement at 1.2550 levels, before resuming higher again. A major resistance was taken out while GBP/USD rallied from 1.1950 through 1.3515 levels earlier and hence a meaningful retracement lower would be considered to be healthy before the next leg higher. Once the corrective phase is done, we would turn bullish again.
Trading plan:
Remain short against 1.3515, taken partial/full profits at 1.2930 in the short term.
Good luck!
