GBP/USD dropped further to as low as 1.5234 last week and the break of 1.5271 support confirmed that whole decline from 1.6746 has resumed. Initial bias remains on the downside this week and current fall should target 100% projection of 1.6618 to 1.5271 from 1.6165 at 1.4818 next. On the upside, above 1.5408 minor resistance will turn bias neutral and bring consolidations. But after all, near term outlook will remain bearish as long as 1.5773 resistance holds and deeper decline is still anticipated.

In the bigger picture, 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.

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