Despite dipping to 1.3450 last week, GBP/USD failed to take out 1.344 fibonacci level and turned sideway. Initial bias is neutral this week first. On the upside, above 1.3607 minor resistance will confirm short term bottoming. In such case, intraday bias will be turned back to the upside for rebound to 55 day EMA (now at 1.3801). Nonetheless, on the downside, decisive break of 1.3448 will resume the whole fall from 1.4376 and target next fibonacci level at 1.2874.
In the bigger picture, current development suggests that whole medium term rebound from 1.1936 (2016 low) has completed at 1.4376 already, with trend line broken, on bearish divergence condition in daily MACD, after rejection from 55 month EMA (now at 1.4223). 38.2% retracement of 1.1936 (2016 low) to 1.4376 at 1.3448 was almost met. Break there will target 61.8% retracement at 1.2874 and below. Outlook will stay bearish as long as 55 day EMA (now at 1.3801) holds, even in case of strong rebound.
In the longer term picture, rise from 1.1946 (2016 low) is viewed as a corrective move, no change in this view. Rejection from 55 month EMA argues that it might be completed already. Larger down trend from 2.1161 (2007 high) could extend to a new low. This will now be the preferred case as long as 1.4376 resistance holds.
