GBP/USD range reaches decisive moment for bear or bull break

GBP/USD is showing a lengthy bearish reversal since the end of February 2021. More recently, price action has bounced at the previous bottom creating a double bottom.
The GBP/USD seems to have completed a bearish 5 wave pattern (purple). This could be part of a larger bearish ABC pattern (red).
The bullish break could confirm the wave 3 (green) of 3 (grey) within the larger wave C (pink) of the 4-hour chart.

Chris Svorcik Elite CurrenSea

The GBP/USD is now stuck between support and resistance but a breakout could offer the needed clarification. Let’s review.

Price charts and technical analysis

The GBP/USD seems to have completed a bearish 5 wave pattern (purple). This could be part of a larger bearish ABC pattern (red).

Currently price action is probably in a bullish wave C (purple), which could complete the wave B (red) of a larger ABC (red).
The double bottom could have completed the wave c (pink) of wave B (purple).
A bullish breakout (green arrows) above the resistance trend line (orange) and long-term moving averages would confirm this analysis.
The main upside targets are the previous tops (red boxes).
A bearish bounce at the resistance (orange arrows) could end the wave B (red) and start the wave C (red),
A bearish push could retest the support line (green) and bounce (blue arrow).
A bearish breakout below the support (green) could indicate a downtrend (red arrows). In that case, price action could be completing a bearish 123 (black) and the bullish correction is invalidated.

On the 1 hour chart, blue SWAT candles indicate a bullish trend. But a breakout remains key for confirming any upside:

A push above wizz 4 level with strong price action could confirm the breakout (green arrows).
The bullish break could confirm the wave 3 (green) of 3 (grey) within the larger wave C (pink) of the 4 hour chart.
A bearish breakout (red arrow), however, indicates that the upside was not a wave 1-2 but an ABC (orange) pattern.

The analysis has been done with the ecs.SWAT method and ebook.

Author

Chris Svorcik

Elite CurrenSea

Experience Chris Svorcik has co-founded Elite CurrenSea in 2014 together with Nenad Kerkez, aka Tarantula FX. Chris is a technical analyst, wave analyst, trader, writer, educator, webinar speaker, and seminar speaker of the financial markets.

EUR/USD extends its optimism past 1.1900

EUR/USD retains a firm underlying bid, surpassing the 1.1900 mark as the NA session draws to a close on Monday. The pair’s persistent uptrend comes as the US Dollar remains on the defensive, with traders staying cautious ahead of upcoming US NFP prints and CPI data.

GBP/USD hits three-day peaks, targets 1.3700

GBP/USD is clocking decent gains at the start of the week, advancing to three-day highs near 1.3670 and building on Friday’s solid performance. The better tone in the British Pound comes on the back of the intense sekk-off in the Greenback and despite re-emerging signs of a fresh government crisis in the UK.

Gold picks up pace, retargets $5,100

Gold gathers fresh steam, challenging daily highs en route to the $5,100 mark per troy ounce in the latter part of Monday’s session. The precious metal finds support from fresh signs of continued buying by the PBoC, while expectations that the Fed could lean more dovish also collaborate with the uptick.

XRP struggles around $1.40 despite institutional inflows

Ripple (XRP) is extending its intraday decline to around $1.40 at the time of writing on Monday amid growing pressure from the retail market and risk-off sentiment that continues to keep investors on the sidelines.

Japanese PM Takaichi nabs unprecedented victory – US data eyed this week

I do not think I would be exaggerating to say that Japanese Prime Minister Sanae Takaichi’s snap general election gamble paid off over the weekend – and then some. This secured the Liberal Democratic Party (LDP) an unprecedented mandate just three months into her tenure.