GBP/USD’s break of 1.2247 support last week completed a double top pattern (1.2647, 1.2643). The development suggests that whole corrective rise from 1.1409 has already finished. Initial bias stays on the downside this week for retesting 1.1409 low. On the upside, above 1.2238 minor resistance will turn intraday bias neutral first. But risk will stay on the down side for another decline.
In the bigger picture, while the rebound from 1.1409 is strong, there is no indication of trend reversal yet. Down trend from 2.1161 (2007 high) should still resume sooner or later. Next medium term target will be 61.8% projection of 1.7190 to 1.1946 from 1.3514 at 1.0273. In any case, outlook will remain bearish as long as 1.3514 resistance holds, in case of strong rebound.
In the longer term picture, long term outlook remains clearly bearish, as it’s held well below long term falling trend line that started back at 2116 (2007 high). Rejection by 55 month EMA also affirmed bearishness. Break of 1.1946 will target 61.8% projection of 1.7190 to 1.1946 from 1.3514 at 1.0273.
