GBP/USD rose to 1.4008 last week but failed to sustain above 1.4000 resistance and retreated. Initial bias remains neutral first. On the upside, break of 1.4008 should reaffirm the bullish case that correction from 1.4240 has completed. Further rise should be seen back to retest 1.4240 high. However, break of 1.3668 will extend the correction from 1.4240 with another falling leg.
In the bigger picture, as long as 1.3482 resistance turned support holds, up trend from 1.1409 should still continue. Decisive break of 1.4376 resistance will carry larger bullish implications and target 38.2% retracement of 2.1161 (2007 high) to 1.1409 (2020 low) at 1.5134. However, firm break of 1.3482 support will argue that the rise from 1.1409 has completed and bring deeper fall to 1.2675 support and below.
In the longer term picture, a long term bottom should be in place at 1.1409, on bullish convergence condition in monthly MACD. Rise from there would target 38.2% retracement of 2.1161 to 1.1409 at 1.5134. Reaction from there would reveal whether rise from 1.1409 is just a correction, or developing into a long term up trend.
