The strong rebound in GBP/USD last week suggests that the correction from 1.3867 may have been completed at 1.3158 already. But with an interim top forming at 1.3483, the initial bias is neutral this week first. On the upside, above 1.3483 will target the 61.8% retracement level from 1.3867 to 1.3158 at 1.3596. A strong breakout there will bring a retest of the high price 1.3867. However, a sustained break of the 55 hourly moving average (now at 1.3342) would temper the bullish view and retest 1.3158 instead.
In the bigger picture, the current development suggests that price action from 1.3867 is merely a corrective pattern within the broader uptrend from 1.0351 (2022 low). With support holding at 1.3008, the uptrend continues in the medium term and a break of 1.3867 returns in favor of a later stage, towards the main resistance 1.4248 (2021 high).
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.
