After initial consolidation, GBP/USD's fall from 1.6456 finally resumed on Friday by taking out 1.6077 and reached as low as 1.5978 last week. The development is inline with our view that rebound form 1.5829 has completed with three waves up to 1.6456. Initial bias remains on the downside for 1.5896 cluster support first (100% projection of 1.6456 to 1.6077 from 1.6274 at 1.5895 next. Break will indicate that recent down trend is resuming for t 1.5706 key cluster support. On the upside, above 1.6066 minor resistance will turn intraday bias neutral first. But recovery should be limited below 1.6274 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 treated as a correction to down trend from 2.1161, has completed at 1.7043. Firm break of 1.5706 cluster support (38.2% retracement of 1.3503 to 1.7043 at 1.5691) will confirm this case and indicate that whole down trend from 2.1161 is likely resuming for a new low below 1.3503. However, note that break of 1.6456 resistance will in turn shift favor to the case that recent price actions from 1.7043 are merely developing into consolidations to the larger rise from 1.3503. That is, whole medium term rise from 1.3503 might not be finished yet and another rise could still be seen to 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.