Weekly waves: GBP/USD, gas and Bitcoin

GBP/USD bears take control and break bottom

The GBP/USD made a bullish retracement to and bearish bounce at the 38.2% Fibonacci resistance level:

1. The GBP/USD bounce at the 38.2% Fib indicates a wave 4 (pink) pattern.

2. Price action has now broken below the bottom after a strong bearish decline, which has been labeled as a wave 1 (yellow).

3. Price action is expected to continue with its downtrend (red arrows) as part of a wave 3 (yellow).

4. The main targets are the Fibonacci levels at 1.1325, 1.1250, and 1.1175. 

5. Eventually a shallow retracement is expected to occur within wave 4 (yellow). 

6. The retracement should not break above the previous bottoms and resistance zones (red boxes).

7. A further decline is then expected within wave 5 (yellow).

8. A bullish push above the resistance levels makes it likely that another wave pattern is valid.

NGAS head and shoulders pattern indicates reversal 

The NGAS 4 hour chart is showing a reversal chart pattern:

1. The NGAS chart offers a classical head and shoulders reversal chart pattern (orange boxes).

2. The bullish push up within wave B/2 stopped at the 61.8% Fibonacci level.

3. The bearish decline after the bearish bounce has been very strong and is likely some type of wave 3 (yellow).

4. A mild retracement within the wave 4 (yellow) could take price eventually back to the 23.6% or 38.2% Fibonacci levels. 

5. A deeper bullish retracement invalidates the wave 4 (yellow) pattern.

6. A bearish continuation aims for the Fibonacci targets down below.

7. If price action only reaches the -27.2% Fibonacci target, then it’s most likely a wave C ([pink). If price action goes to the -61.8% Fib, then it could be either a wave 3 or C.

8. A break below the -61.8% Fibonacci level indicates a wave 3 (pink).

BTC/USD breaks low and prepares for decline

Bitcoin (BTC/USD) is breaking the bottom and low for a continuation of the downtrend:

1. The BTC/USD bulls are disappointed yet again after a bullish rally was unable to break above the resistance zone.

2. The break of the bottom should complete the bullish, shallow wave 4 (yellow) and start the bearish wave 5 (yellow).

3. The main target is the -27.2% Fibonacci target around $12k with an important zone around the round level of $15k.

4. The wave 5 (yellow) could move lower within a falling wedge reversal chart pattern (orange lines). 

5. A strong bullish bounce is needed to confirm the start of any reversal (blue arrows)

6. The wave 5 (yellow) would complete a wave C (pink) of wave W (pink) or wave 2 (gray).

The analysis has been done with the indicators and template from the SWAT method simple wave analysis and trading. For more daily technical and wave analysis and updates, sign-up to our newsletter