the GBP/USD made a bullish reversal at the 1.2820-50 support zone. This was indicated and expected in our most recent EUR/USD and GBP/USD video from yesterday.
What is the main target for the Cable? Let’s review the Fibonacci levels and wave patterns.
Price Charts and Technical Analysis
The GBP/USD made a bullish bounce around 1.2830. This is the 21 ema zone and 38.2-50% Fibonacci levels of wave 4 (pink).
Price action is now breaking above the 21 ema zone. The current 4H candle needs to close relatively near to the candle high to confirm a strong breakout.
- A strong breakout is expected to send price action higher (green arrows) within the uptrend channel (green lines).
- The main target is the Wizz 8 and round level at 1.40.
- This target could indicate the end of the uptrend as price action completes a wave 5 (pink) of wave 5 (purple).
- A reversal pattern (red arrows) could take place via a head and shoulders chart pattern (orange boxes).
On the 1 hour chart, price action made a bearish retracement via the downtrend channel.
- Price action bounced (green box) at the long-term moving averages of the 1 hour chart and the bottom of the downtrend channel.
- It then created a strong push up followed by a higher low. The third swing up was an impulsive push (light blue arrow) as expected.
- The retracement completed an ABC (grey) pattern within wave 4 (pink).
- Now price action could push higher (green arrow) if the breakout is strong.
- A bull flag pattern (grey arrows) could emerge followed by another new high (green arrows).
- The uptrend remains valid (red circle) as long as price action does not enter below the support zone (blue box) and top of wave 1 (grey).
The main target is the 1.40 round level.
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.