- The Pound against the US Dollar Forex rate, GBPUSD has sustained a positive tone.
- This has been assisted by the weaker US Dollar, with global asset classes extending the July “risk on” theme.
- The “risk on” phase has been buoyed this week by the EU Recovery Fund agreement this week, as well as by ongoing speculation from positive trials for both treatments of and a vaccine for COVID-19.
- This leaves the asymmetric risks for further GBPUSD gains today for latter July and possibly into August.
GBPUSD day trade outlook: Dip and firm rebound leaves bullish tone
A sell-off and firm rebound Wednesday from new support established at 1.2644, to build on this week’s strong advance above the 1.2650/69, 1.2685/87, 1.2719 and 1.2754 resistances, plus the topping line from early June, to keep the risk to the upside into Thursday.
Day trade setup
- We see an upside bias for 1.2768 and the cycle high at 1.2813; a break here quickly aims for 1.2849, even 1.2891.
- But below 1.2644 aims for 1.2615 support, which we would look to try to hold; below possibly opens risk down to 1.2586.
GBPUSD intermediate-term outlook
The early July push above 1.2542 signalled an intermediate-term shift to a bull trend.
- Upside risks: We see an intermediate-term bull trend to aim for 1.2813, 1.3000 and maybe 1.3200.
- What changes this? Below 1.2251 shifts the intermediate-term bull trend straight to an intermediate-term bear trend.