GBP/USD’s down trend extended to as low as 1.2024 last week. Initial bias remains on the downside this week for 1.1946 low. Break will target 100% projection of 1.4376 to 1.2391 from 1.3381 at 1.1396. On the upside, break of 1.2209 resistance will suggest short term bottoming. In this case, lengthier consolidation should be seen first before another decline.
In the bigger picture, down trend from 1.4376 (2018 high) is extending towards 1.1946 low. We’d be cautious on bottoming there. But decisive break will resume down trend from 2.1161 (2007 high) to 61.8% projection of 1.7190 to 1.1946 from 1.4376 at 1.1135. In any case, medium term outlook will stay bearish as long as 1.3381 resistance holds, in case of strong rebound.
In the longer term picture, corrective rebound from 1.1946 (2016 low) was rejected by 55 month EMA. Long term outlook remains bearish. Firm break of 1.1946 will indicate resumption of down trend from 2.1161 (2007 high). Next target is 61.8% projection of 1.7190 to 1.1946 from 1.4376 at 1.1135.
