GBP/USD's decline resumed after brief recovery and reached as low as 1.6049. Initial bias remains on the downside this week and GBP/USD should target 100% projection of 1.6720 to 1.6166 from 1.6408 at 1.5854 first and then 1.5706 cluster support next. On the upside, above 1.6246 minor resistance will turn intraday bias neutral and bring consolidations. But upside should be limited by 1.6408 resistance and bring fall resumption.

In the bigger picture, we're still favoring the bearish case that medium term rebound from 1.3503, which is is treated as a correction to down trend from 2.1161, has completed at 1.7043. Focus now turns to 1.5706 cluster support (38.2% retracement of 1.3503 to 1.7043 at 1.5691) for confirmation. Break there will argue that whole down trend form 2.1161 is likely resuming for a new low below 1.3503. On the upside, however, break of 1.7043 will indicate that rise from 1.3503 is still in progress to resistance zone of 1.7332/8236 (50% and 61.8% retracement of 2.1161 to 1.3503) before completion.

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. Rebound from 1.3503, which is treated as correction in the larger down trend, should be limited by resistance zone of 1.7332/8236 and bring down trend resumption towards 1.4063 low. We'll hold on to the bearish view as long as 1.8236 fibonacci level holds.

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