GBP/USD’s rebound from 1.2251 resumed last week and hit as high as 1.2083. Initial bias stays on the upside this week. Decisive break of 1.2813 will resume whole rally from 1.1409. Next target will be 100% projection of 1.1409 to 1.2647 from 1.2065 at 1.3303. On the downside, below 1.2673 minor support will turn intraday bias neutral first. But further rise will remain in favor as long as 1.2480 support holds.
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.
