GBP/USD dipped to 1.3102 last week but recovered ahead of 1.3048 low. Initial bias is turned neutral this week first. The development argues that consolidation pattern from 1.3048 is going to extend further. On the upside, above 1.3244 minor resistance will bring another rise to 1.3362 and above. But upside should be limited by 1.3471 to bring larger decline resumption eventually. On the downside, break of 1.3048 will resume fall from 1.4376 for 1.2874 fibonacci level next.
In the bigger picture, whole medium term rebound from 1.1936 (2016 low) should have completed at 1.4376 already, after rejection from 55 month EMA (now at 1.4179). Fall from 1.4376 should extend to 61.8% retracement of 1.1936 (2016 low) to 1.4376 at 1.2874 next. We’ll pay attention to the reaction from there to asses the chance of long term down trend resumption. On the upside, sustained break of 38.2% retracement of 1.4376 to 1.3048 at 1.3555 is needed to indicate medium term bottoming. Otherwise, outlook will remain bearish in case of strong rebound.
In the longer term picture, rise from 1.1946 (2016 low) is viewed as a corrective move, no change in this view. Rejection from 55 month EMA argues that it might be completed already. Larger down trend from 2.1161 (2007 high) could extend to a new low. This will now be the preferred case as long as 1.4376 resistance holds.