Last week, GBP/USD broke below the 1.3265 support level, indicating a short-term peak at 1.3433. This week, the initial bias suggests a downward trend towards the 1.3000 cluster support level, which represents a 38.2% retracement from 1.2298 to 1.3433 at 1.2999. It is expected that there will be strong support at this level, leading to a potential rebound. If the price manages to break above the minor resistance level of 1.3174, the intraday bias will become neutral.
Looking at the bigger picture, as long as the 1.3000 support level holds, the upward trend from the 2022 low of 1.0351 is likely to continue. The next target is projected to be at 1.4022, which represents a 61.8% projection from 1.0351 to 1.3141 from 1.2298. However, there is a possibility of a medium-term top already in place if there is a decisive break below 1.3000, leading to a deeper fall towards the 1.2664 support level.
In the long-term perspective, as long as the 1.2298 support level remains intact, the rise from the long-term bottom of 1.0351 is expected to persist. The significant breach of the 55 M EMA (currently at 1.2811) signals a bullish trend reversal. However, a confirmation of a structural resistance break at 1.4248 is essential to solidify this bullish outlook. Without this confirmation, the price action from 1.0351 could simply be part of a consolidation pattern. This indicates that further monitoring and analysis are required to assess the long-term trajectory of GBP/USD.
