GBP/USD’s rebound from 1.2675 resumed last week and hit 1.3175, but retreated from there. Initial bias remains neutral this week first. Another rise is expected as long as 1.2910 support holds. Break of 1.3175 will target a test on 1.3482 high. On the downside, however, break of 1.2910 will suggest completion of the rebound. Intraday bias will be turned back to the downside for 38.2% retracement of 1.1409 to 1.3482 at 1.2690.
In the bigger picture, focus stays on 1.3514 key resistance. Decisive break there should also come with sustained trading above 55 month EMA (now at 1.3307). 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 1.3307). Long term outlook stays bearish for now, despite bullish convergence condition in monthly MACD.
