- The aggressive US Dollar strength of the past 1-2 weeks has begun to recede this week.
- This has been as equity averages have stabilised globally and begun to rebound, alongside commodity prices, whilst credit concerns have been eased by global central bank actions.
- This has seen a more negative, correction, a weakening of the US Dollar across most major currencies (barring the Japanese Yen).
- Here we focus on one of the biggest casualties of US Dollar strength, the Pound Sterling, with GBPUSD starting to recover from its lowest level last week since 1985!
GBPUSD day trade outlook: Bear threats eased, upside bias
A Tuesday recovery above 1.1675 to build on Monday probe lower and overnight rebound, for now easing see bear forces from the extremely aggressive, mid-March capitulation type plunge through multiple long-term supports (to the lowest level since 1985), to shift the risk higher into Wednesday.
· We see an upside bias for 1.1858, then 1.1933; a break above aims for 1.2000 and 1.2043, maybe towards 1.2129.
· But below 1.1742 targets 1.1648, which we would look to try to hold. Below targets 1.1580 and 1.1489, maybe for the cycle low at 1.1410.
GBPUSD intermediate-term outlook
We see an intermediate-term bear trend with the break below 1.2725.
· Downside risks: We see risks for 1.1410, 1.1250, 1.1000 and 1.0500.
· What changes this? Above 1.2423 switches the intermediate-term bull trend to neutral and above 1.3200 to a bull trend.
Daily GBPUSD Chart