GBP/USD’s sharp retreat from 1.6400 could extend further but after all, we’d stay bullish as long as 1.5976 support holds and expect rise from 1.5343 to resume later. Above 1.6265 minor resistance will flip bias back to the upside. Further break of 1.6400 will target 61.8% projection of 1.4230 to 1.6298 from 1.5343 at 1.6621 next.
In the bigger picture, price actions from 1.3503 (2009 low) are treated as consolidation to long term down trend from 2007 high of 2.1161. Rise from 1.4230 is treated as the third leg of such consolidation and with 1.5343 support intact, such rise could still continue for 1.7043 resistance. But after all, strong resistance should be seen between 1.7043 and 50% retracement of 2.1161 to 1.3503 at 1.7332 to limit upside. On the downside, break of 1.4230 support will be the first signal of down trend resumption and will turn focus to 1.3503 low for confirmation.(ACTION FX)