GBP/USD's rally extended to as high as 1.5720 last week. The decisive break of 1.5521 resistance confirmed that whole fall from 1.7043 has completed at 1.4230 already. Initial bias will remains on the upside this week for 61.8% retracement of 1.7043 to 1.4230 at 1.5968 next. On the downside, below 1.5547 minor support will turn intraday bias neutral and bring retreat. But downside should be contained above 1.5123 support and bring another rise.

In the bigger picture, current rise from 1.4230 is treated as the third leg of the whole medium term consolidation pattern that started at 2009 low of 1.3503. Further rally would now be seen towards 1.7043 resistance and possibly above as the consolidation continues. However, we'd expect strong resistance between 1.7043 and 50% retracement of 2.1161 to 1.3503 at 1.7332 and finally bring long term down trend resumption. On the downside, break of 1.5123 support will argue that rise from 1.4230 has possibly completed earlier than we thought and will turn focus back to this low.

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 rebound from 1.3503 is confirmed to be completed.