The GBP/USD showed a strong rally after reaching 1.31 support. Will price continue the bullish correction or will the downtrend emerge as the winner? For the moment a larger move up seems likely, at least towards the 23.6% Fib at 1.34. This is a major decision zone because a bullish breakout could confirm the start of a wave 2 (pink) whereas a bearish bounce could see price continue with the downtrend.
The GBP/USD could be building a potential wave 1-2 (blue) of a larger ABC correction if price breaks above the resistance trend line (orange) and 23.6% Fib at 1.34. Strong bearish price action could make this wave pattern invalid. The same would occur if price breaks below the bottom of 1.31.
This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Please note that such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.