GBP/USD's consolidation from 1.6165 extended further with another dip to 1.5868 but quickly recovered. More sideway trading could still be seen in near term. But even in case of another fall, we'd continue to expect downside to be contained by 1.5631/5851 support zone to conclude the consolidation and resume rise from 1.5271. Decisive break of 1.6165 resistance will confirm such rally resumption and should target 1.6618 resistance next.
In the bigger picture, price actions from 1.3503 are treated as consolidations to long term down trend from 2.1161. Such consolidation should be in form of triangle and current development suggests that rise from 1.5271 is the fifth leg, the final leg of such pattern. Hence, while current rise from 1.5271 might extend higher, upside should be limited below 1.6746 resistance to conclude the consolidation finally. On the downside, break of 1.5271 support will indicate that the down trend from 2.1161 is finally resuming for a new low below 1.3503. Nevertheless, break of 1.6746 will invalidate this view and would likely bring stronger rally to 1.7043 resistance and above.
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.