GBP/USD edged higher to 1.6875 but reversed from there and fell sharply since then. The break of 1.6516 support indicates that a short term top is formed with bearish divergence conditions in 4 hours MACD. Initial bias remains on the downside this week for 1.6250 support first. Break there will confirm that whole rise from 1.5706 has completed and will bring retest of this support next. On the upside, above 1.6574 minor resistance will turn intraday bias neutral and bring recovery. But risk will remain on the downside as long as 1.6875 resistance holds.
In the bigger picture, question remains on whether medium term rebound from 1.3503, which is is treated as a correction to down trend from 2.1161, has completed at 1.7043. Focus is now on 1.6250 support. Break there will shift favor to the case that price actions from 1.6111 are merely a three wave consolidation to fall from 1.7043 and should have completed. That is, GBP/USD has topped out at 1.7043 already. Deeper decline should then be seen to send GBP/USD through 1.5706 support for a break of 1.3503 low eventually.
Nevertheless, strong rebound from 1.6250, followed by break of 1.6875 will indicate favor the bullish case that rise from 1.3503 is still in progress for another high above 1.7043. Nevertheless, even in such case, we'll continue to look for loss of momentum and reversal signal as GBP/USD enters into resistance zone of 1.7332/8236 (50% and 61.8% retracement of 2.1161 to 1.3503) to conclude such corrective rise.
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, should be limited by resistance zone of 1.7332/8236 and bring down trend resumption towards 1.4063 low. We'll hold on to the bearish view as long as 1.8236 fibonacci level holds.