GBP/USD’s strong rally last week indicates that pull back from 1.3047 has completed at 1.2588 already. And the larger correction from 1.1946 is still in progress. With a temporary top formed at 1.3029, initial bias is neutral this week first. In case of another fall, downside should be contained by 1.2849 support to bring rise resumption. Break of 1.3029 will send GBP/USD through 1.3047 to 61.8% projection of 1.2108 to 1.3047 from 1.2588 at 1.3168 next.
In the bigger picture, overall, price actions from 1.1946 medium term low are seen as a corrective pattern that is still in progress. While further upside is now in favor, overall outlook remains bearish as long as 1.3444 key resistance holds. Larger down trend from 1.7190 is expected to resume later after the correction completes. And break of 1.2588 will indicate that such down trend is resuming.
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. However, firm break of 1.3444 should confirm reversal and turn outlook bullish.
