GBP/USD's pull back from 1.6618 extended to as low as 1.6207 last week but subsequent rebound argues that such pull back might be finished already. Initial bias is mildly on the upside this week for a retest on 1.6618 resistance first. Break will resume whole rally from 1.5780 towards 1.6746. On the downside, however, below 1.6207 again will extend the fall from 1.6618 towards 1.6110. Break there will indicate that rise from 1.5780 is completed and will turn outlook bearish for this support.
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 1.4229 is treated as the third leg of such consolidation. The corrective structure of the fall from 1.6746 to 1.5780 suggests that such rebound is not completed yet. Further rise could be seen through 1.7043 resistance. But we'd expect strong resistance at 50% retracement of 2.1161 to 1.3503 at 1.7332 to limit upside and bring reversal. Nevertheless, break of 1.5780 will revive the case that GBP/USD has already topped out at 1.6746. The next medium term move would either be the fourth leg of the consolidation from 1.3503, or resuming long term down trend from 2.1161.
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 consolidation from 1.3503 is confirmed to be completed.