the GBP/USD is testing the Fibonacci retracement support levels of wave C, which is a key decision zone for a bullish reversal or bearish breakout.
4 hour chart
The GBP/USD breakout below the 100% Fibonacci level and bottom of wave A (green) invalidates (red x) the expected triangle chart pattern and could indicate a bearish ABC zigzag pattern. A bullish bounce, however, could confirm (green check) the triangle and indicate a 3 wave up within the expected wave D (green).
1 hour chart
The GBP/USD needs to stay above the 88.6% Fibonacci retracement level to keep the triangle pattern as the most likely scenario. A break below the 88.6% Fib makes the triangle less likely and a push below the 100% level fully invalidates it. A bullish ABC (orange) pattern could take place within wave D (green).
The analysis has been done with SWAT method (simple wave analysis and trading)
This article was originally posted on FX Empire
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