GBP/USD Approaches Decision Zone After Bearish Momentum Pattern


4 hour

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The GBP/USD made a strong bearish retracement at the previous top (red). Price could either be building a bearish reversal after it completed bullish waves 5 or it could keep pushing for one higher high. A bullish breakout could see price make an extension towards the round level at 1.45 whereas a bearish reversal could see price break below the support trend line (green).

1 hour

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The GBP/USD bearish pullback has retraced all the way back to the 61.8% Fibonacci level, which is a key level for the wave 4 (black) pattern. A bullish breakout above the local resistance (orange) could indicate a move higher towards the Fib targets of wave 5 whereas break below the 61.8% makes a wave 4 less likely and a break below the blue line invalidates this wave pattern. Considering the strong bearish momentum, a reversal might occur but the breakout direction is key.

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Author: Travis Esquivel

Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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