On weekly time frame for "Big Picture" view and perspective of larger trend ( ) , we note that from 2007 high GBPUSD fell to 2009 low. Since then it has been in mostly sideways range July 2014 low. Many were quick to write GBP off with targets well below 2009 low. For some reason this sentiments has not disappeared and has been revived during the recent off from July 2014 high. However, Based on my counts as shown in the chart this decline appears to be merely 50% fib retracement in to potential support from previous and now also from rising 200 period moving average.
Should this play out then in due course upside target of the next leg could be 1.8 and might extend to 1.85. So this could be our road map for next 12 months or so which we will update and monitor.
Zooming in to Daily Time Frame:
At 50% fib retracement of the move from July 2013 - July 2014 and at 200 period moving average on weekly chart, we also seem to have wave c completing with ( ) suggesting that potential low is in place already. From which we have developed initial rally that could be the fist minor wave i of the next cycle. Therefore, on completion of this minor wave i, we are likely to retrace back to 1.60 area or little lower, where potential long entry could be considered with stop at 1.5850 and looking for retest of July high around 1.72 area as initial target. Further refinement could be achieved for entry and stop by looking at lower time frame which I will leave it to you to carry out employing your usual method or analysis for your trade planning. We will continue to monitor and update as necessary as we follow this pair on weekly basis.