GBP/USD’s down trend resumed last week and dived to as low as 1.4557 before turning sideway. Initial bias remains on the downside this week as long as 1.5080 minor resistance holds and further fall is expected to 100% projection of 1.7630 to 1.5269 from 1.6671 at 1.4310. On the upside, above 1.5080 will turn intraday outlook neutral and bring recovery to 4 hours 55 EMA (now at 1.5428). But upside should be limited below 1.5600 support turned resistance and bring fall resumption.

In the bigger picture, there are some different interpretations of the structure of the whole down trend from 2.1161, with different projection targets. Main question is whether fall from 1.8668 is the fifth wave in the five wave sequence from 2.1161 (1.9337, 2.0158, 1.7445, 1.8668, ?) or it’s the third wave inside the fall from 2.0158. In either case, fall from 1.8668 is possibly completing a five wave sequence of its own. Strong rebound from 1.4278/4310 cluster projection target (100% projection of 1.7630 to 1.5269 from 1.6671 at 1.4310, 161.8% projection of 2.0158 to 1.7445 from 1.8668 at 1.4278), followed by break of 1.5600 resistance will suggests that a medium term bottom is formed and bring larger scale correction. Though, sustained trading below 1.4278/4310 will target 1.3680 key long term support (01 low).

In the longer term picture, recent development further confirms that long term reversal has happened at 2.1161. The impulsive nature and the scale of the fall from 2.1161 also provides strong evidence to the case of the start of a long term down trend. Break of the long term trend line support (now at 1.5068) confirms that whole multi decade advance from 1.0463 (85 low) has already completed with three waves up to 2.1161. In other words, the current fall from 2.1161 is just the start of a long term down trend that should eventually bring GBP/USD through 1.3680 (01 low).