GBP/USD’s break of 1.3007 resistance last week suggests that correction from 1.3482 has completed at 1.2675. That came after drawing support from 38.2% retracement of 1.1409 to 1.3482 at 1.2690. Initial bias is now back on the upside this week for retesting 1.3482/3514 resistance zone next. Decisive break there will carry larger bullish implications and target 61.8% projection of 1.1409 to 1.3482 from 1.2675 at 1.3956 next. On the downside, break of 1.2845 support will dampen this view and turn focus back to 1.2675 support instead.
In the bigger picture, focus is back on 1.3415 key resistance now. Decisive break there should also come with sustained trading above 55 month EMA (now at 1.3312). That should confirm medium term bottoming at 1.1409. Outlook will be turned bullish for 1.4376 resistance and above. Nevertheless, rejection by 1.3514 will maintain medium term bearishness for another lower below 1.1409 at a later stage.
In the longer term picture, GBP/USD is staying below decade long trend line from 2.1161 (2007 high). It also struggles to sustain above 55 month EMA (now at 1.3317). Long term outlook stays bearish for now, despite bullish convergence condition in monthly MACD.
