GBP/USD dropped further to as low 1.5661 last week despite some intra-week volatility. The development suggest that rebound from 1.5234 is already completed at 1.5991. Initial bias remains on the downside for 1.5648 support this week. Break will confirm this bearish case and target a test on 1.5234. Also, note that 1.6165 key cluster resistance (61.8% retracement of 1.6746 to 1.5234 at 1.6168) remains intact and thus, whole decline from 1.6746 is in favor to extend. On the upside, break of 1.5832 minor resistance is needed to signal completion of the fall from 1.5991. Otherwise, we'll stay cautiously bearish even in case of recovery.

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 stay 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.