GBP/USD edged lower to 1.2872 last week but recovered notably since then. Initial bias is neutral first this week first. Corrective fall from 1.3514 could still extend lower through 1.2872, as low as 1.3209 resistance holds. Nevertheless, firm break of 1.3209 will turn bias to the upside for retesting 1.3514 instead.
In the bigger picture, rise from 1.1958 medium term bottom is not completed yet despite current pull back from 1.3514. Such rally is expected to resume later to 1.4376 key resistance. Reactions from there would decide whether it’s in consolidation from 1.1946 (2016 low). Or, firm break of 1.4376 will indicate long term bullish reversal. In any case, for now, outlook will stay bullish as long as 1.2582 resistance turned support holds.
In the longer term picture, it’s still unsure whether long term down trend form 2.1161 (2007 high) has completed at 1.1946 already. Focus is immediately on 55 month EMA (now at 1.3489) and sustained break will be the first serious sign of long term reversal. Further break of trend line resistance (now at 1.3922) will be another signal. Focus would then be turned to 1.4376 key resistance for confirmation.
