GBP/USD dropped to 1.5706 last week but formed a short term bottom there and turned sideway. More consolidations would be seen in term and above 1.5868 minor resistance will bring stronger recovery. But in that case, upside should be limited by 1.6082 cluster resistance (50% retracement of 1.6454 to 1.5706 at 1.6080) and bring fall resumption. Below 1.5706 will extend the decline from 1.6618 to 100% projection of 1.6746 to 1.5780 from 1.6618 at 1.5652 and below.
In the bigger picture, rise from 1.4229, which is treated as the third leg of consolidation from 1.3503 (2008 low) should be finished at 1.6746 after GBP/USD completed a head and shoulder top reversal pattern (ls: 1.6298, h: 1.6746, rs: 1.6618). Fall from 1.6746 could be the fourth leg of the consolidation pattern from 1.3503 (2008 low) or resuming long term down trend from 2.1161 (2007 high). In either case, a test on 1.3503/4229 support zone should be seen. On the upside, break of 1.6618 resitsance is needed to invdalite this view. Or we'll now stay cautiously bearish in GBP/USD.
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.