GBP/USD continued to stay in range below 1.5779 last week and outlook remains unchanged. Initial bias remains neutral this week for more sideway trading between 1.5561 and 1.5779. On the upside, above 1.5779 will put focus on 1.5887 resistance. break there will confirm completion of fall from 1.6165 and would target a test on this high. Nonetheless, there is no confirmation of reversal with 1.5887 resistance intact. Break of 1.5561 minor support will indicate that rebound from 1.5422 has completed and will flip bias back to the downside to extend the fall from 1.6165 to below 1.5422.
In the bigger picture, no change in the view that price actions from 1.3503 are treated as consolidations to long term down trend from 2.1161. At this point, we're favoring the case that such consolidation is either finished with three waves to 1.6746, or five waves as a triangle at 1.6165. Break of 1.5271 support will affirm either case and should target 1.4229 key support. Decisive break there should extend the long term down trend through 1.3503 low. Meanwhile, strong rebound ahead of 1.4229, or a break of 1.6165, will dampen the immediate bearish view and extend the consolidation from 1.3503 instead.
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.