The GBP/USD pair saw a decline from 1.3433 last week, dropping to 1.2842 before bouncing back. The outlook for this week is uncertain, with a neutral bias for potential consolidations initially. However, a further decline is anticipated as long as the resistance at 1.3042 remains intact. If the price falls below 1.2842, the next target would be the 61.8% retracement level at 1.2732. On the other hand, a decisive break above 1.3042 could signal a short-term bottom and shift the bias to the upside.
Looking at the bigger picture, there is a mild bearish divergence in the D MACD, suggesting that a medium-term peak may have already been reached at 1.3433. The current price movements are viewed as a correction within the overall uptrend from the 1.0351 low in 2022. A deeper decline could potentially lead to the 38.2% retracement level at 1.2256, which is near the structural support at 1.2298. It is expected that strong support will emerge at this level, sparking a rebound.
In the long term, as long as the support at 1.2298 remains intact, the uptrend from the long-term low of 1.0351 is likely to persist. The significant break above the 55-day EMA (currently at 1.2811) indicates a reversal to a bullish trend. However, a breakthrough above the structural resistance at 1.4248 is necessary to confirm this bullish scenario. Without this confirmation, the price movements from 1.0351 could be viewed as part of a consolidation phase.
