the GBP/USD is testing a critical 78.6% Fibonacci retracement level of the expected wave B (green). However, the direction of the US Dollar and the financial markets will be impacted by the upcoming Non-Farm Payroll (NFP) data from the US on Friday 5 July.
If the current wave outlook is correct, the GBP/USD is expected to move higher and complete a bullish swing within wave C (green). The current ABC (green) zigzag is invalidated if price breaks below the 100% Fibonacci retracement level whereas a break above the resistance trend lines (red) would make a move up more likely. The upside target is for the moment the 50% Fib of wave 4 vs 3.
The GBP/USD is moving sideways for the moment, which is probably caused by the fact that Thursday was a national holiday in the US and Friday has a large news event. Price will probably move the most when the NFP event takes place. The current wave pattern suggests that the wave C (orange) of wave B (green) has been completed at the recent low and 78.6% Fibonacci level.
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