Last week, GBP/USD showed a decrease in downward momentum, despite a drop from the short-term high of 1.3433. This week, the initial bias remains neutral. The currency pair is expected to find strong support around the 1.3000 cluster support level, which represents a 38.2% retracement from 1.2298 to 1.3433 at 1.2999. If the pair manages to move above the minor resistance level of 1.3174, it could signal a shift in bias towards an upward trend for a more significant rebound. However, a clear break below 1.3000 could indicate bearish implications for the market.
Looking at the bigger picture, as long as the support at 1.3000 remains intact, the upward trend from the 2022 low of 1.0351 is still ongoing. The next target is projected to be at 1.4022, which is a 61.8% projection from 1.0351 to 1.3141 from 1.2298. However, considering the mild bearish divergence in the daily MACD, a decisive break below 1.3000 could suggest that a medium-term peak has been reached, leading to a deeper decline towards the support level at 1.2664.
In the long term, as long as the support at 1.2298 holds, the rise from the long-term low of 1.0351 is expected to continue. The significant breakthrough of the 55-day EMA, currently at 1.2811, indicates a reversal in the bullish trend. Nevertheless, a break above the structural resistance level at 1.4248 is crucial to confirm this trend. Without this confirmation, the price movements from 1.0351 may simply be part of a consolidation pattern.
