GBP/USD ? Corrective Structure Gives Bears the Upper Hand ?
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Dear Traders,
The GBP/USD is at a critical juncture. If bears can keep up the pressure, the dam could break and open the floodgates for a strong sell-off.
This analysis will provide an update on the most recent price developments for the Cable.
Bears are Not Backing Down
The GBP/USD tried to rally since the Mar 29 low, but has been unable to produce any price-action that resembles a proper 5-wave impulse to the upside. Instead we have seen a complex sideways correction which suggests that the market could be gearing up for a further downward move soon.
The middle section of the structure since the Mar 29 low seems to be quite clearly an expanding triangle (see black trend lines). The price action prior to the triangle could be counted as a double zigzag. This suggests that we are witnessing a complex double or triple combination (WXY or WXYZ). So at least another 3 wave structure has to be present after the triangle (blue x point). We certainly have established at least one bullish impulse since that low of x. But it is even possible that this upwards move has already traced out a complete (albeit somewhat uneven) zigzag and therefore concluded the entire correction earlier today. Alternatively, we are still missing another small impulse to the upside in order to truly finish a zigzag. The two different price forecasts are shown in white and yellow lines.
Whatever the case may be, it does not look good for GBP bulls. Price action has not shown any clear signature for a bullish continuation, so the danger lies to the downside.
A break below 1.4010 (Mar 29 low) should seal a bearish fate for the Cable in the short- term and potentially medium-term.
All the best long your trading journey
Hubert
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