GBP/USD dropped to as low as 1.2881 as corrective fall from 1.3514 resumed. Initial bias is now on the downside this week for 61.8% projection of 1.3514 to 1.2905 from 1.3209 at 1.2833 first. Break will target 100% projection at 1.2600 next. On the upside, above 1.2959 minor resistance will turn intraday bias neutral first. But further decline is expected as long as 1.3209 resistance holds, in case of recovery.
In the bigger picture, rise from 1.1958 medium term bottom is not completed yet despite current pull back form 1.3514. Such rally is expected to resume later to 1.4376 key resistance. Reactions from there would decide whether it’s in consolidation from 1.1946 (2016 low). Or, firm break of 1.4376 will indicate long term bullish reversal. In any case, for now, outlook will stay bullish as long as 1.2582 resistance turned support holds.
In the longer term picture, it’s still unsure whether long term down trend form 2.1161 (2007 high) has completed at 1.1946 already. Focus is immediately on 55 month EMA (now at 1.3489) and sustained break will be the first serious sign of long term reversal. Further break of trend line resistance (now at 1.3922) will be another signal. Focus would then be turned to 1.4376 key resistance for confirmation.