Technical outlook:
GBP/USD earlier completed the first leg of its rally between 1.1950 and 1.3515 levels respectively. Since the above highs at 1.3515 levels, the single currency pair has been into a corrective phase. The first leg of its corrective drop terminated at 1.2900 levels, also fibonacci 0.382 support of previous rally. Subsequent pullback towards 1.3284 was the second leg of corrective phase. At this point in writing, GBP/USD seems to have resumed its final drop towards 1.2700 and 1.2550 levels, to complete the corrective phase that began from 1.3515 levels earlier. Looking at the overall wave structure since 1.1950 levels, we expect bulls to remain in control after the current corrective phase completes. Also note that prices should stay above 1.1950 for the bullish structure to remain valid. A host of convergence is seen around the 1.2530/50 levels; the fibonacci 1.271 extension of the corrective drop, fibonacci 0.618 retracement of the previous rally and the past resistance turned support zone. The upside targets of the next bull run are pointing towards 1.4200 at least.
Trading plan:
Aggressive traders may sell with stop above 1.3285, targeting 1.2750 and 1.2550
Conservative traders could remain flat for now and look to buy around 1.2750/1.2550, stop @ 1.1950 and target 1.4200.
Good luck!
