GBP/USD outlook – consolidation likely ahead of US GDP

27 May 2016

Resistance – 1.4708, 1.4740, 1.4770

Support – 1.4636, 1.46, 1.4549

• Cable’s retreat to near 1.4636 levels following a bearish price RSI divergence on the hourly chart also marked a turn lower from the Cypher potential reversal zone of 1.4708.
  

• Nevertheless, the pair managed to stay above 1.4636, thus avoiding slipping into the hands of the bears. This coupled with a sideways hourly RSI around 50.00 levels indicates the currency pair is likely to remain stuck in the range of 1.4708-1.4636 ahead of the US GDP release.
  

• Only a break above 1.4740 would signal continuation of the rally as such a break would negate bearish price RSI divergence. On the downside, breach of 1.4636, preferably on hourly closing basis would expose sub 1.46 levels.