GBP/USD rose to 1.6057 last week and formed a temporary top there and turned sideway. Initial bias remains neutral this week and more consolidations could be seen below 1.6057 first. Nevertheless, even in case of another fall, we'll remain slightly bullish in near term as long as 1.5664 resistance turned support holds. That is, pull back from 1.6298 has completed with three waves down to 1.5343. Current rise should extend further and above 1.6057 will target a retest on 1.6298 resistance next.

In the bigger picture, price actions from 1.3503 (2009 low) are treated as consolidation to long term down trend from 2007 high of 2.1161. Rise from 1.4230 is treated as the third leg of such consolidation and with 1.5296 support intact, such rise could still continue for 1.7043 resistance. But after all, strong resistance should be seen between 1.7043 and 50% retracement of 2.1161 to 1.3503 at 1.7332 to limit upside. On the downside, break of 1.4230 support will be the first signal of down trend resumption and will turn focus to 1.3503 low for confirmation.

In the longer term picture, the corrective nature of the multi-decade advance from 1.0463 (85 low) to 2.1161 as well as the impulsive nature of the fall from there suggests that GBP/USD is now in an early stage of a long term down trend. Another low below 1.3503 is anticipated after rebound from 1.3503 is confirmed to be completed.

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