GBP/USD’s fall from 1.2813 short term top extended lower last week. The firm break of 55 day EMA now argues that whole rebound from 1.1409 has completed with three waves up to 1.2813. Initial bias stays on the downside for 1.2065 support. Decisive break there will confirm and target a test on 1.1409 low. On the upside, break of 1.2587 minor resistance will turn bias back to the upside instead.
In the bigger picture, while the rebound from 1.1409 is strong, there is not enough evidence for trend reversal yet. Down trend from 2.1161 (2007 high) should still resume sooner or later. However, decisive break of 1.3514 should at least confirm medium term bottoming and turn outlook bullish for 1.4376 resistance first.
In the longer term picture, long term outlook remains clearly bearish, as it’s held well below long term falling trend line that started back at 2116 (2007 high). Prior rejections by 55 month EMA also affirmed bearishness. Further fall is expected as long as 1.3514 resistance holds.
