GBP/USD dropped sharply after edging higher to 1.2678 last week, but stays above 1.2434 support so far. Initial bias remains neutral this week first. On the downside, decisive break of 1.2434 will confirm short term topping. Considering bearish divergence condition in D MACD, fall from 1.2678 would then be a correction to whole up trend from 1.0351. Deeper decline should then be seen back towards 1.1801 cluster support (38.2% retracement of 1.0351 to 1.2678 at 1.1789).
In the bigger picture, as long as 1.1801 support holds, rise from 1.0351 medium term bottom (2022 low) is expected to extend further. Sustained break of 61.8% retracement of 1.4248 (2021 high) to 1.0351 at 1.2759 will add to the case of long term bullish trend reversal. However, firm break of 1.1801 will indicate rejection by 1.2759, and bring deeper decline, even as a correction.
In the long term picture, while the rise from 1.0351 (2022 low) has been strong, there is no clear indicate of long term trend reversal yet. As long as 1.4248 resistance holds (2021 high), long term outlook will remain neutral at best.
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