GBP/USD edged lower to 1.2251 last week but rebound strongly since then. Still, upside was limited below 1.2542 near term resistance. Initial bias remains neutral this week first. On the upside, break of 1.2542 will argue that whole decline from 1.2813 has completed. Intraday bias will be turned back to the upside for 1.2813 high. Meanwhile, break of 1.2251 will resume the fall to 1.2065 key near term support instead.
In the bigger picture, while the rebound from 1.1409 is strong, there is not enough evidence for trend reversal yet. Down trend from 2.1161 (2007 high) should still resume sooner or later. However, decisive break of 1.3514 should at least confirm medium term bottoming and turn outlook bullish for 1.4376 resistance first.
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). Prior rejections by 55 month EMA also affirmed bearishness. Further fall is expected as long as 1.3514 resistance holds.