Technical outlook:
GBP/USD still continues to drift in a tight trading range, having printed intraday lows at 1.2975 yesterday. Please note that the corrective structure that began from 1.3515 highs earlier would need to print another low below the 1.2900 levels to complete. As discussed yesterday, the support zone for terminating is between 1.2550 and 1.2750 levels, where a number of convergences are seen. The most prominent are past resistance which turned into the support zone around 1.2550 along with the fibonacci 0.618 retracement of the entire rally between 1.1950 and 1.3515 respectively. Also note that 1.2850 is also a potential bounce, hence initiating long positions is suggested. The overall structure remains firmly bullish until prices stay above the 1.1950 levels, going forward. Expect one more drop below 1.2900 before the bulls are back. The upside targets for GBP/USD remain towards 1.4200/1.4400 levels respectively.
Trading plan:
Initiate long positions around 1.2550/1.2750 levels, stop @ 1.1950 and target is 1.4200
Good luck!
