GBP/USD’s strong rally last week confirms the short-term bottom at 1.3139. Initial bias remains on the upside this week to resistance at 1.3459. A strong break there would indicate that the full correction from 1.3867 has been completed, targeting resistance at 1.3657 for confirmation. On the downside, minor support at 1.3296 will shift the intraday bias to neutral again first.
In the bigger picture, price action from 1.3867 is a corrective pattern within the broader uptrend from 1.0351 (2022 low). With support holding at 1.3008, the upward trend continues in the medium term and a break of 1.3867 is likely for a later stage, towards the main resistance 1.4248 (2021 high). However, a strong break of 1.3008 would at least lead to a deeper decline to the 38.2% retracement from 1.0351 to 1.3867 at 1.2524, with an increased risk of a bearish reversal.
In the longer term picture, as long as the 1.4248/4480 resistance area holds (38.2% retracement from 2.1161 to 1.0351 at 1.4480), the long term outlook will remain bearish. That is, price movements from 1.0351 are considered a corrective pattern for the downtrend from 2.1161 (2007 high) only. However, a decisive break of 1.4248/4480 would be a strong signal of a long-term bullish reversal.
