GBP/USD's consolidation from 1.4230 extended further last week but the rally attempt was limited below 1.4769 resistance as expected and GBP/USD dropped sharply towards the end of the week. Initial bias is mildly on the downside this week and break of 1.4346 support will argue that such consolidation might have completed. Further break of 1.4230 will confirm down trend resumption for 1.3503 low. On the upside, however, decisive break of 1.4769 resistance will dampen our view and target 61.8% retracement of 1.5521 to 1.4230 at 1.5028 instead.
In the bigger picture, our bearish view remains unchanged. Fall from 1.7043 is tentatively treated as resumption of the whole down trend from 2007 high of 2.1161. Such fall should target 61.8% projection of 2.1161 to 1.3503 from 1.7043 at 1.2310 after taking out 1.3503 low. On the upside, break of 1.5521 resistance is needed to be the first signal of bottoming. Otherwise, outlook will remain bearish.
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 should have completed and the whole fall from 2.1161 is likely resuming for 61.8% projection of 2.1161 to 1.3503 from 1.7043 at 1.2310 next.