GBP/USD’s rebound from 1.2251 extended higher to 1.2669 last week. As a temporary top was formed, initial bias is neutral this week first. Further rise is expected as long as 1.2508 minor support holds. On the upside, break of 1.2669 will target a test on 1.2813 high. On the downside, however, break of 1.2508 will turn bias back to the downside for 1.2251 support instead.
In the bigger picture, while the rebound from 1.1409 is strong, there is not enough evidence for trend reversal yet. Down trend from 2.1161 (2007 high) should still resume sooner or later. However, decisive break of 1.3514 should at least confirm medium term bottoming and turn outlook bullish for 1.4376 resistance first.
In the longer term picture, long term outlook remains clearly bearish, as it’s held well below long term falling trend line that started back at 2116 (2007 high). Prior rejections by 55 month EMA also affirmed bearishness. Further fall is expected as long as 1.3514 resistance holds.
