GBP/USD rose further to as high as 1.5228 last week, just inch below 38.2% retracement of 1.6875 to 1.4230 at 1.5240. Initial bias remains on the upside this week and further rise could still be seen. However, whole recovery from 1.4230 resistance is treated as a correction in the larger decline from 1.6875 only. Hence, we'd expect strong resistance between 1.5240 fibo level and channel resistance at 1.5306 and bring reversal. Break of 1.4873 will argue that rebound from 1.4230 is completed and will flip bias back to the downside for retesting this low.

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. However, decisive break 1.5521 resistance will argue that whole fall from 1.7043 is finished. This will also suggest that medium term rise from 1.3503 is not finished yet and another high above 1.7043 might be seen before long term down trend from 2.1161 resumes.

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.

GBP/USD

GBP/USD

GBP/USD

GBP/USD