GBP/USD edged higher to 1.3917 last week but reversed from there. Current development suggests that corrective decline from 1.4240 is still in progress. Initial bias remains mildly on the downside this week. Break of 1.3669 will target 1.3482 key resistance turned support. On the upside, above 1.3781 minor resistance will turn bias neutral first. But risk will stay on the downside as long as 1.3917 resistance holds.
In the bigger picture, as long as 1.3482 resistance turned support holds, up trend from 1.1409 should still continue. Decisive break of 1.4376 resistance will carry larger bullish implications and target 38.2% retracement of 2.1161 (2007 high) to 1.1409 (2020 low) at 1.5134. However, firm break of 1.3482 support will argue that the rise from 1.1409 has completed and bring deeper fall to 1.2675 support and below.
In the longer term picture, a long term bottom should be in place at 1.1409, on bullish convergence condition in monthly MACD. Rise from there would target 38.2% retracement of 2.1161 to 1.1409 at 1.5134. Reaction from there would reveal whether rise from 1.1409 is just a correction, or developing into a long term up trend.
