While the recovery from 1.6250 was strong, it was still limited below 1.6692 and GBP/USD weakened against since then. The choppy look of such recovery suggests that it's merely a correction to fall from 1.6692 only. Initial bias is mildly on the downside this week for 1.6250 first. Break there will target 100% projection of 1.6692 to 1.6250 from 1.6603 at 1.6161 next. However, a break above 1.6603 will dampen this immediate bearish view and turn focus back to 1.6692/6740 resistance zone.

In the bigger picture, while the rebound from 1.5706 was strong, it was still limited below 1.6740 resistance and hence, we'd continue to prefer the bearish case. That is, medium term rebound from 1.3503, which is treated as correction in the long term down trend from 2.1161, has completed at 1.7043. Break of 1.5706 will affirm this case and target a retest of 1.3503 low in medium term. However, note that break of 1.6740 resistance will confirm that fall from 1.7043 has completed with three waves down to 1.5706 already. The three wave structure will indicate that it's merely a correction to medium term rebound from 1.3503 only. In other words, another high above 1.7043 should be seen before GBP/USD tops out.

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, which is treated as correction in the larger down trend, has likely completed and fall from 1.7043 is tentatively treated and resumption of such down trend that will send GBP/USD through 1.3503 low eventually.

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