GBP/USD’s strong rebound last week suggests that pull back from 1.3651 should have finished at 1.3026. Further rise is in favor this week for 1.3651 resistance first. Break there will resume medium term rise from 1.1946 and target 1.3835 key resistance next. On the downside, below 1.3120 minor support will resume the fall from 1.3651 through 1.3026 instead.
In the bigger picture, while the medium term rebound from 1.1946 was strong, GBP/USD hit strong resistance from the long term falling trend line. Outlook is turned a bit mixed and we’ll turn neutral first. On the downside, decisive break of 1.2773 key support will argue that rebound from 1.1946 has completed. The corrective structure of rise from 1.1946 to 1.3651 will in turn suggest that long term down trend is now completed. Break of 1.1946 low should then be seen. On the upside, break of 1.3835 support turned resistance will revive the case of trend reversal and target 38.2% retracement of 2.1161 (2007 high) to 1.1946 (2016 low) at 1.5466 .
In the longer term picture, long the outlook is turned a bit mixed as GBP/USD failed to break through falling tend line resistance. We’ll turn neutral first and assess the outlook again and price actions unfold.
