the GBP/USD managed to break below the previous bottom of wave 1 (blue) and is confirming a downtrend continuation.
The GBP/USD reached the 1.2825 target and could extend its bearish momentum towards the round level of 1.2750. Price could either continue immediately or make a light pullback towards the 1.29 resistance zone. Any bullish price action, however, is expected to be capped and find a resistance spot for a new lower low, which could confirm the wave 3 (blue) pattern remains in an indecisive spot from a wave perspective. The main aspect to keep an eye on is whether price bounces or breaks at the top (red) resistance line of the downtrend channel. A bearish continuation, especially below the 100% level, could indicate an impulsive wave 3 pattern whereas a reversal could indicate a bullish wave count instead.
The GBP/USD completed an extended wave 5 (dark red) with 5 extra waves (grey) and now price could be ready for a bullish ABC (dark red) correction within wave 4 (orange). The main resistance zone is the area around the 23.6-50% Fibonacci levels near 1.2875-1.2935. The GBP/USD could also make a bearish breakout if it’s able to push below the support trend line (blue).
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