GBP/USD’s strong rally and break of 1.2236 resistance confirms resumption of whole rebound from 1.2036. Initial bias stays on the upside this week for 38.2% retracement of 1.3141 to 1.2036 at 1.2458. Sustained break there will pave the way to 61.8% retracement at 1.2783. On the downside, below 1.2287 minor support will turn intraday bias neutral first.
In the bigger picture, the strong rebound from 38.2% retracement of 1.0351 to 1.3141 at 1.2075 argues that price action from 1.3141 are merely a correction to rise from 1.0351 (2022 low). Current rally from 1.2036 is tentatively seen as the second leg of the pattern. Hence, while further rally is in favor, upside should be limited by 1.3141 to start the third leg.
In the long term picture, sustained trading above 55 M EMA (now at 1.2832) is needed to be the first sign of bullish trend reversal. Decisive break of 1.4248 structural resistance is needed to confirm. Otherwise, outlook will be neutral at best.