GBP/USD’s rally from 1.1801 continued to as high as 1.2421 last week but failed to break through 1.2445/6 resistance zone. With a temporary top formed, initial bias is turned neutral this week first. On the upside, decisive break of 1.2445/6 resistance zone will resume larger rally from 1.0351, and target 1.2759 fibonacci level. However, break of 1.2203 resistance turned support will extend the corrective pattern from 1.2445 with another falling leg, and turn bias back to the downside.
In the bigger picture, the rise from 1.0351 medium term term bottom (2022 low) is in progress for 61.8% retracement of 1.4248 (2021 high) to 1.0351 at 1.2759. Sustained break there will add to the case of long term bullish trend reversal. Further break of 61.8% projection of 1.0351 to 1.2445 from 1.1801 at 1.3095 could prompt upside acceleration to 100% projection at 1.3895. For now, this will remain the favored case as long as 1.1801 support holds, even in case of deep pull back.
In the long term picture, while the rise from 1.0351 (2022 low) has been strong, there is no clear indicate of long term trend resistance yet. As long as 1.4248 resistance holds (2021 high), long term outlook will remain neutral at best.
