GBP/USD Weekly Forecast

Short term outlook in GBP/USD remains rather mixed for the moment. Price actions from 1.4984 should be correcting rebound from 1.3503, which is then correcting whole fall from 2.0158. Typically, price actions in such correction of correction are rather unpredictable. Nevertheless, Another fall is mildly in favor now as long as 1.4660 resistance holds. Below 1.4093 will target 1.3503 low. On the upside, above 1.4660 will argue that rebound from 1.3503 is resuming for 1.5722 medium term resistance instead.

In the bigger picture, a medium term bottom is in place at 1.3503 after GBP/USD completed the five wave sequence from 2.0158 (1.7445, 1.8668, 1.4557, 1.5722, 1.3503). Price actions from 1.3503 is treated as correction/consolidation in the larger down trend from 2.1161. It's uncertain whether such correction from 1.3503 is developing into sideway consolidation below 1.5722 or a stronger rebound. Nevertheless, as long as 1.3503 low holds, such consolidation is still in favor to extend further with another rise before completion. Decisive break of this support is needed to confirm down trend resumption.

In the longer term picture, as discussed before, the corrective nature of the multi-decade advance from 1.0463 (85 low) to 2.1161 as well as the impulsive nature of the fall from there suggests that GBP/USD is now in an initial stage of a long term down trend. While some medium term scale of consolidation might be seen in the near future, the long term down trend is expected to resume after completing such consolidation.

Based on ActionForex.com Technical Outlook