GBP/USD's fall extended further to as low as 1.5769 last week and met mentioned 100% projection of 1.7043 to 1.6111 from 1.6740 at 1.5805 but turned sideway since then. Recovery from 1.5769 might have completed at 1.6124 already and initial bias will remain on the downside this week for 1.5769 first. Break there will bring fall resumption to 161.8% projection of 1.7043 to 1.6111 from 1.6740 at 1.5232 next. On the upside, above 1.6027 minor resistance will argue that consolidation from 1.5769 is indeed still in progress and another rise could be seen to above 1.6124 before fall resumption.
In the bigger picture, decisive break of 1.6111 support confirmed the case that GBP/USD has topped out in medium term by completing a head and shoulder top reversal pattern (ls: 1.6742, h: 1.7043, rs: 1.6740). Also, note that medium term rise from 1.3503 is treated as a correction in the long term decline from 2.1161 and should have completed too. Medium term outlook is turned bearish and the current fall from 1.7043 is tentatively treated as resumption of the long term down trend, which should target a new low below 1.3503 eventually. On the upside, break of 1.6740 resistance is needed to invalidate this bearish view.
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. Current rebound from 1.3503 is treated as a correction in the larger down trend only, rather than the start of a new up trend. Hence, the long term down trend is still expected to resume after completing such correction. However, sustained break of 50% retracement of 2.1161 to 1.3503 at 1.7332 will argue that the long term trend in GBP/USD is indeed already changed and we'll reassess the bullish potential in that case.