GBP/USD: Minor degree wave four may be unfolding as a triangle

After reviewing the latest price action in GBP/USD, it's clear that I initially got one degree ahead of myself. What appeared to be a higher-degree move now looks more like price action unfolding within a minor degree wave 4 of the larger impulsive wave (1).

The wave count has become clearer following a clean five-wave advance up to wave 3, which has been followed by a notable slowdown in momentum. This slowdown is typical of wave 4 behavior—particularly in the form of a running triangle, as we may be seeing right now.

Wave 4 triangle structure in play

Triangles are common in wave 4 positions, acting as consolidation phases before the final thrust in wave 5. In this case, price action appears to be carving out a classic A-B-C-D-E triangle structure, with wave c currently completing or nearing its low. If this plays out as expected:

• Wave d could bounce modestly within the narrowing structure.
• Wave e would complete the triangle, potentially paving the way for an impulsive wave 5 to the upside.

This pattern also aligns well with typical Elliott Wave guidelines—wave 4 often retraces into the territory of wave 2 but doesn’t violate wave 1, and triangles frequently occur before a terminal move in a sequence.

What to watch for

• A break above the triangle's upper boundary (wave b/d line) would signal a likely start to wave 5.
• Failure to hold triangle support could invalidate the pattern, prompting a reassessment.

In summary, although I initially overcounted the degree of the trend, GBP/USD still appears to be within minor wave 4 of wave (1), with a triangle structure unfolding as a consolidation phase. A breakout from this pattern should set the stage for wave 5’s advance.

Keep your eyes on the triangle boundaries and manage risk accordingly.