GBP/USD rose sharply last week and resumed whole rebound from 1.4830. Initial bias remains on the upside this week and current rally would target 61.8% retracement of 1.6380 to 1.4830 at 1.5788. On the downside, below 1.5418 minor support will turn bias neutral first. Overall, we're still treating rebound from 1.4830 as a correction. But break of 1.5196 support is now needed to indicate completion. Otherwise, further rally will remain mildly in favor.
In the bigger picture, price actions from 1.3503 (2009 low) are treated as consolidations to long term down trend from 2.1161 and could have completed as a triangle pattern at 1.6380. Focus is on 1.4229 support and sustained break there should bring long term down trend resumption for a new low below 1.3503. However, strong rebound from or above 1.4229 will indicate that the whole pattern from 1.3503 is still in progress.
In the longer term picture, the complicated triangle pattern from 1.3503 argues that it's the fourth wave of the five wave sequence from 2.1161. That means, firstly, 1.3503 shouldn't be the end point of the downtrend yet and a new low is expected. However, secondly, as the next fall could be the fifth wave, the breach of 1.3503 could be shallow and brief from long term point of view and we'll then see a more sustainable rebound.
IMOH, Clement I.
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