We are treating the drop from 2.0396 as a leading diagonal (wave 1 of C within the A-B-C decline from 2.1160). Under this interpretation, the GBPUSD rally from 1.9599 is wave 2 within the 5 wave drop (wave C) from 2.0396.
We wrote yesterday that “with the rally to 2.0025 in 3 waves and with waves i and ii of the next leg down possibly complete at 1.9997, a bearish bias is warranted against that level.” Cable has dropped, tested 1.97 this morning, so the bearish bias is correct to this point. Coming below 1.9599 would bolster this outlook. Near term resistance is at 1.9820.