What’s next after GBP/USD bearish pullback reaches 1.39?
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GBP/USD bearish retracement was expected. But the impulsiveness of the decline is very strong, which is 1 of the main reasons for the potential end of the uptrend.
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A strong bullish bounce could create a bullish ABC up (blue arrows). Whereas a bear flag (grey arrows) should send the GU pair lower again in a wave 345.
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GBP/USD bullish bounce will be a key factor in determining the next price swings. The bearish pullback after the heavy uptrend was expected.
The GBP/USD made a bearish reversal as expected in our video analysis. The main question is whether the uptrend is over or is it just a retracement?
This article analyses what future price patterns are critical for answering this key question.
Price charts and technical analysis
The GBP/USD bearish retracement was expected. But the impulsiveness of the decline is very strong, which is 1 of the main reasons for the potential end of the uptrend.
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The main pattern to keep an eye on now is the potential bounce at the support zone. This includes the Fibonacci targets, retracements, and 144 ema close.
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A strong bullish bounce (green arrows) makes it more likely that the current decline is part of a wave A (grey) of a larger wave 4 (purple) correction.
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In that case, a bearish bounce at the previous highs is expected and a larger consolidation zone should appear.
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A weak bullish bounce (grey arrows) indicates lack of buyers and a bearish continuation pattern.
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In that case, a bearish breakout (red arrows) should take the price lower.
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This could confirm a wave 1 (orange) of a new downtrend.
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The GBP/USD bullish bounce will be a key factor in determining the next price swings. The bearish pullback after the heavy uptrend was expected. Now it’s a key moment to see whether the price patterns indicate a larger correction down.
On the 1 hour chart, we can see the difference in expectations. Both scenarios are equally possible from a wave analysis point of view.
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A strong bullish bounce could create a bullish ABC up (blue arrows).
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Whereas a bear flag (grey arrows) should send the GU pair lower again (red arrow) in a wave 345 (light blue).
The analysis has been done with the ecs.SWAT method and ebook.
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