GBP/USD's consolidation from 1.6474 continued last week with a dip to 1.6110 before recovering. Initial bias is neutral this week. As noted before, while another fall cannot be ruled out yet, we'd expect strong support inside 1.6004/6193 support zone, probably at 61.8% retracement from 1.5780 to 1.6474 at 1.6045, to contain downside and bring another rise. We're favoring the case that correction from 1.6746 has finished with three waves down to 1.5780 already. Above 1.6336 minor resistance will flip bias back to the upside first. Break of 1.6474 will resume the rise from 1.5780 to 1.6546 first. Break will affirm this bullish case and should send GBP/USD through 1.6746 resistance next. However, break of 1.6004 will dampen this view and turn focus back to 1.5780 instead.
In the bigger picture, price actions from 1.3503 (2009 low) are treated as consolidation to long term down trend from 2007 high of 2.1161. Rise from 1.4229 is treated as the third leg of such consolidation. The corrective structure of the fall from 1.6746 to 1.5780 suggests that such rebound is not completed yet. Further rise would be seen through 1.7043 resistance. But we'd expect strong resistance at 50% retracement of 2.1161 to 1.3503 at 1.7332 to limit upside and bring reversal. Nevertheless, break of 1.5780 will revive the case that GBP/USD has already topped out at 1.6746. The next medium term would either be the fourth leg of the consolidation from 1.3503, or resuming long term down trend from 2.1161.
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.