GBPUSD pushed above 1.2813 levels yesterday and managed to reach 1.2900 handle. The currency pair is pulling back sharply as we prepare to publish this update, and is trading around 1.2850 levels. A break below 1.2720 would confirm a meaningful top in place.
GBPUSD probable wave counts are as follows: The rally from 1.1414 through 1.2815 levels might be an impulse wave. Since then GBPUSD has been carving a corrective wave A-B-C, which is expected to terminate towards 1.1950 levels.
The drop from 1.2813 through 1.2250 could be Wave A within the corrective drop A-B-C as proposed above. The rally from 1.2250 through 1.2900 could be defined as Wave B potential. Since Wave B has travelled beyond 1.2800, the structure could be an expanded flat.
If the above count holds well, GBPUSD should reverse lower towards 1.2250 and further, as Wave C unfolds. The fibonacci 0.618 support of the previous rally between 1.1414 through 1.2800 is seen to be passing through 1.1950 mark.
Probability remains high for a bullish bounce, if prices manage to reach 1.1900/50 mark going forward. Immediate price support is seen towards 1.2720 levels on the 4H chart presented here. A break lower would confirm that a meaningful top is in place.
Most traders might be preparing to initiate fresh short positions between 1.2850/1.2900 levels, with a protective stop around 1.2950. The projected target could e seen around 1.1900/50 levels respectively.
Technical Analysis Team
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