GBP/USD’s consolidation from 1.3012 extended last week and outlook is unchanged. Initial bias remains neutral first. Such consolidation could still extend with another fall before completion. But in that case, downside should be contained above 1.2582 resistance turned support to bring rise resumption. On the upside, break of 1.3012 will resume the rise from 1.1958 to 1.3381 resistance next.
In the bigger picture, a medium term bottom was formed at 1.1958, ahead of 1.1946 (2016 low). At this point, rise from 1.1958 is seen as the third leg of consolidation from 1.1946. Further rise would be seen back towards 1.4376 resistance. For now, this will remain the favored case as long as 1.2582 resistance turned support holds. However, firm break of 1.2582 will turn focus back to 1.1946 low.
In the longer term picture, at this point, price actions from 1.1946 are seen developing into a corrective pattern. That is, down trend from 2.1161 (2007 high) is still expected to resume later. But sustained break of 1.4376 resistance will now be a strong signal of long term reversal.
