GBP/USD Strong Impulse Triggers Bearish Wave 3 Pattern

Dear traders, the GBP/USD made a second bearish breakout below the support trend line (dotted blue), which confirms the development of a bearish wave C (orange).

4 hour chart

The GBP/USD bearish continuation within wave C (orange) seems likely after price completed a wave B (orange) correction. The main target is the 50% Fibonacci level of wave 4 (blue) at 1.2850, which is a key bullish bounce or bearish break spot.

1 hour chart

The GBP/USD completed a bullish ABC (dark red). Price then broke below support (dotted blue). Price is now testing the Fibonacci retracement levels of wave 4 vs 3 (green), which are likely to act as a bearish bounce spot. The wave 4 remains valid as long as price stays below the 61.8% Fib. A bullish break invalidates (red x) this wave outlook. A bearish breakout, pullback, and continuation would confirm (green check) the wave 5 (dark red).

Good trading,

Chris Svorcik

The analysis has been done with the help of SWAT method (simple wave analysis and trading)

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