GBP/USD

Cable edges further lower to 2.2154, breaking marginally below 2.0156 low but lacks follow through selling so far. As this point, further downside is still in favor as long as 2.0242 resistance holds. As discussed before, cable's correction from 2.0652 is still in progress and is expected to further test 2.0086/2.0206 support zone before completion. However as we'd expect such consolidation to be contained by this support zone, focus will be on reversal signal as the current fall proceeds.

Above 2.0242 will turn intraday outlook neutral first and probably bring strong recovery. But still, break of 2.0462 cluster resistance (61.8% retracement of 2.0652 to 2.0156 at 2.0463) is needed to confirm correction from 2.0652 has completed and bring retest of key medium term resistance of 61.8% projection of 1.3680 (01 low) to 1.9554 (05 high) from 1.7047 (05 low) at 2.0677. Otherwise, further downside is still in favor.

In the bigger picture, regardless of the internal structure, the whole rally from 1.7047 represents resumption of the long term up trend from 1.3680 and has almost met it's initial target of 2.0677 already. Even though a short term top is in place at 2.0652 the whole set of rally from 1.7047 should still be in good shape as long as 1.9621 support remains intact. Consolidation from 2.0652 should be relatively brief in medium term and further upside is still expected. Sustained trading above 2.0677 will target 2.1 psychological resistance first.

However, break of medium term rising trend line (now at 1.9916) will warn that the medium term rally has already topped out at 2.0652 after failing the 2.0677 target. Further break of 1.9621 support will encourage much deeper correction could be seen to 1.9183 support first and with prospect of further decline to long term rising trend line support (now at 1.8327).