GBP/USD jumped to as high as 1.5991 last week but failed to sustain gain and retreated sharply towards the end. Initial bias is neutral this week for some consolidations. We'd continue to favor another rise with 1.5799 minor support intact and above 1.5991 will target 1.6165 key cluster resistance (61.8% retracement of 1.6746 to 1.5234 at 1.6168) next. However, below 1.5799 will argue that whole rebound from 1.5234 is finished and will flip bias back to the downside for 1.5648 support for confirmation. After all, we'd like to emphasize that as long as 1.6165 key cluster resistance holds, there is no confirmation of completion of fall from 1.6746 yet and such decline could still continue lower.
In the bigger picture, price actions from 1.3503 are treated as consolidations to long term down trend from 2.1161, no change in this view. Recent development, with lack of sustained selling, dampened the bearish view that such consolidation is completed. We'll turn neutral first. On the upside, break of 1.6165 will favor that such consolidation is going to extend with another rise. But strong resistance should be seen at 50% retracement of 2.1161 to 1.3503 at 1.7332 to limit upside to conclude the consolidation. On the downside, below 1.5234 will revive the case that such consolidation is completed and bring deeper fall to 1.4229 support for confirmation.
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.