- The Pound versus the US Dollar Forex rate, GBPUSD has rebounded twice already this week, thereby sustaining a positive tone.
- This has been mostly driven by the still very weak US Dollar, with US equity indices extending the July “risk on” theme into August.
- However, with US yields moving to record lows, the US Dollar remains vulnerable, even from this weak position.
- This leaves the skewed threat for further GBPUSD gains today and into August.
GBPUSD day trade outlook: A dip, but bull bias intact
Again on Tuesday (as on Monday) a setback and rebound from just below our modest support at 1.2987, from 1.2981, to retain the positive tone from the late July move to a new cycle high at 1.3170 (just below the key March swing high at 1.3200), plus from the latter July surge above the 1.2813 June peak, to keep the risk to the upside into Wednesday.
Day trade setup
- We see an upside bias for 1.3115 and the cycle high at 1.3170; a break here quickly aims for the key peak from March 2020 at 1.3200 and maybe even towards the 2020 high at 1.3284.
- But below 1.2981 aims for 1.2944 support, which we would look to try to hold; below possibly opens risk down to 1.2838.
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 1.3200, 1.3286 and maybe 1.3515.
- What changes this? Below 1.2644 shifts the intermediate-term bull trend straight to an intermediate-term bear trend.