GBP/USD's rebound from 1.5271 short term bottom extended further to as high as 1.5817 last week and closed strongly. Initial bias remains on the upside this week and current rally should continue towards 61.8% retracement of 1.6618 to 1.5271 at 1.6103. On the downside, below 1.5666 minor support, though, will indicate that such rebound is likely finished and should flip bias back to the downside for retesting 1.5271 low first.

In the bigger picture, price actions from 1.3503 are treated as consolidations to long term down trend from 2.1161 and should be near to an end, if not finished at 1.6476. Near term outlook is quite mixed as the nature of the rebound from 1.5271 has many possibilities of roughly equal chance. But in any case, upside should be limited below 1.6618 resistance. Eventually, we'd expect a break of 1.4229 support to signal resumption of the down trend from 2.1161 and that should send GBP/USD through 1.3503 (2008 low).

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.

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