GBP/USD’s sharp decline and break of 1.2768 support last week indicates resumption of decline from 1.3047. Also, it affirmed the case that consolidation pattern from 1.1946 has completed at 1.3047 already, well below 1.3444 key resistance. Initial bias stays on the downside this week for 1.2614 key near term support. Break there would confirm our bearish view and target a test on 1.1946 low next. On the upside, above 1.2802 will bring turn bias neutral and bring recovery. But outlook will remain bearish as long as 1.2977 resistance holds.
In the bigger picture, fall from 1.7190 is seen as part of the down trend from 2.1161. Price actions from 1.1946 medium term low are seen as a consolidation pattern, which could have completed after hitting 55 week EMA. Break of 1.1946 low will target 61.8% projection of 1.5016 to 1.1946 from 1.3047 at 1.1150 next. In case the consolidation from 1.1946 extends, outlook will stay remain bearish as long as 1.3444 resistance holds.
In the longer term picture, no change in the view that down trend from 2.1161 is still in progress. On resumption, such decline would extend deeper to 100% projection of 2.1161 to 1.3503 from 1.7190 at 0.9532.