GBP/USD Downtrend Faces H&S Pattern at Fib Support
|The GBP/USD is moving down lower again but it will probably expand and extend the wave 4 (purple) corrective pattern before continuing with the downtrend. For the moment, price is testing the support of a potential head and shoulders level (green box).
GBP/USD
4 hour
The GBP/USD made a bearish bounce again at the resistance zone (orange box) and 23.6% Fibonacci retracement level of wave 4 vs 3. A bullish bounce could confirm a potential inverted head and shoulders reversal chart pattern (green box) and either indicate a potential triangle chart pattern within the wave 4 or a larger bullish zigzag pattern up to the 38.2% Fibonacci level. Unless price breaks above the 38.2% Fib, the GBP/USD seems ready for a downtrend continuation after a lengthy correction although Brexit news and the announcement of the next UK prime minister could create volatility.
1 hour
GBP/USD seems to be building a corrective wave B (blue) after a strong bullish up in wave A (blue). For the moment, a bullish bounce at the Fibonacci levels of wave B vs A seems the most likely path of least resistance. This remains valid unless price manages to break below the bottom and 100% Fib level at around 1.2382.
The analysis has been done with the CAMMACD.MTF template.
For more daily technical and wave analysis and updates, sign-up up to our ecs.LIVE channel.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.