GBP/USD Bearish Reversal Chart Patterns After Hitting 1.3750

The GBP/USD made a new higher high that hit the 1.3750 target as expected in my EU-GU video. But the uptrend seems to be struggling due to the reversal chart patterns.

Let’s review when to expect a potential bearish reversal. We also analyse what confirms a reversal and what invalidates it.

Price Charts and Technical Analysis

The GBP/USD is showing multiple reversal patterns and signs:

1. Building two separate rising wedge reversal chart patterns:
   1. A larger rising wedge (green and orange lines)
   2. And a smaller rising wedge (blue and red lines)
2. Price action has also bounced at the Wizz 7 target zone
3. GU is showing divergence patterns.
4. Plus there seem to be 5 waves (pink) completed within wave 5 (purple).

All of these factors are increasing the chance of a larger bearish reversal (orange arrows). This remains valid unless price action breaks above the previous tops and goes above 1.37-1.3750 (dotted green arrow).

If bearish price swings do take place, then they could complete a wave B (blue). After that, we expect bullish price action once again to move up within wave C (blue).

On the 4 hour chart, price action did manage to break above the quadruple top…

… But the quick decline after the breakout is indicating a short lived bullish spike rather than a full uptrend continuation.

The main target is the 233 ema and -61.8% Fibonacci target around the round 1.35 level. Either after an immediate breakout or small pullback. But price action could fall even further down after a mild pullback at 1.35.

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Good trading,

Chris Svorcik

The analysis has been done with the indicators and template from the SWAT method (simple wave analysis and trading). For more daily technical and wave analysis and updates, sign-up to our newsletter