GBP/USD Weekly Outlook
GBP/USD's rebound from 1.5296 extended further to as high as 1.5842 last week. Initial bias remains on the upside this week and further rise should be seen to 1.5997 high. Break will confirm that whole rise form 1.4230 has resumed and should target 61.8% projection of 1.4230 to 1.5997 from 1.5296 at 1.6338 next. On the downside, below 1.5710 minor support will turn intraday bias neutral and bring consolidations. But short term outlook will remain bullish as long as 1.5503 support holds.
In the bigger picture, price actions from 1.3503 are viewed as consolidation to fall from 2.1161 only with rise from 1.4230 as the third leg. There is no clear indication that such consolidation is finished. Above 1.5996 will bring another rise to 1.7043 resistance and above. However, we'd expect strong resistance between 1.7043 and 50% retracement of 2.1161 to 1.3503 at 1.7332 and finally bring long term down trend resumption. In any case, a break of 1.4230 support will indicate that the consolidation is completed and down trend from 2.1161 is resuming for another low below 1.3503.
In the longer term picture, the corrective nature of the multi-decade advance from 1.0463 (85 low) to 2.1161 as well as the impulsive nature of the fall from there suggests that GBP/USD is now in an early stage of a long term down trend. Another low below 1.3503 is anticipated after rebound from 1.3503 is confirmed to be completed.
