GBP/USD’s rebound from 1.2099 resumed last week but failed to sustain above 38.2% retracement of 1.3433 to 1.2099 at 1.2609. Immediate focus stays on 1.2609 this week. Firm break there will raise the chance of near term reversal, and target 61.8% retracement at 1.2923. Nevertheless, on the downside, break of 1.2331 support will suggest that the rebound has completed as a correction, and bring retest of 1.2099 low.
In the bigger picture, rise from 1.0351 (2022 low) should have already completed at 1.3433 (2024 high), and the trend has reversed. Further fall is now expected as long as 1.2810 resistance holds. Deeper decline should be seen to 61.8% retracement of 1.0351 to 1.3433 at 1.1528, even as a corrective move. However, firm break of 1.2810 will dampen this bearish view and bring retest of 1.3433 high instead.
In the long term picture, price actions from 1.0351 (2022 low) are seen as a corrective pattern to the long term down trend from 2.1161 (2007 high) only. Outlook will be neutral at best as long as 1.4248 structural resistance holds, even in case of strong rebound.
