GBP/USD recovered to 1.3174 last week but lost momentum since then. Initial bias is neutral this week first. On the upside, above 1.3174 will target 1.3284 resistance first. Break will target a test on 1.3514 high. On the downside, below 1.3034 will bring retest of 38.2% retracement of 1.1958 to 1.3514 at 1.2920.
In the bigger picture, rise from 1.1958 medium term bottom is expected to extend higher to retest 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 1.3507) and sustained break will be the first serious sign of long term reversal. Further break of trend line resistance (now at 1.4045) will be another signal. Focus would then be turned to 1.4376 key resistance for confirmation.
