GBP/USD engaged in sideway trading last week without a clear direction. The supported from 55 day EMA favors more upside near term but break of 1.2614 resistance is at least needed to indicate upside momentum. Overall, price actions from 1.1946 are seen as a corrective pattern and could extend for a while.
Initial bias in GBP/USD remains neutral this week first. On the upside, break of 1.2614 will extend the rise from 1.2108. Overall, price actions from 1.1946 are viewed as a consolidation pattern pattern. Upside should be limited by 1.2705/2774 resistance zone to bring larger down trend resumption eventually. On the downside, below 1.2376 will target 1.2108 support next. Break there will be an early sign of larger down trend resumption.
In the bigger picture, fall from 1.7190 is seen as part of the down trend from 2.1161. There is no sign of medium term reversal yet. Sustained trading below 61.8% projection of 2.1161 to 1.3503 from 1.7190 at 1.2457 will target 100% projection at 0.9532. Overall, break of 1.3444 resistance is needed to confirm medium term bottoming. Otherwise, outlook will remain bearish.
In the longer term picture, no change in the view that down trend from 2.1161 is still in progress. Current momentum suggests that the down trend will go deeper than originally expected to 100% projection of 2.1161 to 1.3503 from 1.7190 at 0.9532.
