GBPUSD seems to have hit resistance just ahead of 1.3200 mark and it might be preparing to retrace deeper, going forward. Alternatively, bulls might be preparing to push beyond 1.3200 resistance before giving up. Looking lower from here, going forward.
GBPUSD probable wave counts are as follows: The rally from 1.1414 lows in March 2020 through 1.2810 looks to have sub divided into 5 waves, hence impulse wave. Normally, an impulse wave is followed by a corrective wave in the opposite direction.
GBPUSD might be unfolding an expanded flat corrective wave since 1.2800/10 mark. An expanded flat normally pushes beyond the extreme before reversing. As in this case Wave A could be defined between 1.2800/10 through 1.2250 respectively.
The subsequent rally between 1.2250 and 1.2800/10 could be Wave B within the expanded flat correction. If the above structure holds true, GBPUSD should turn lower to produce Wave C. Ideally Wave C should terminate below 1.2250 mark.
Also note that fibonacci 0.618 retracement of the above rally is passing through 1.2000/1.2100 mark. High probable bullish reversal could be in the making if prices manage to reach there. Furthermore, the region is also close to previous Wave 4 of one lesser degree.
Traders might remain inclined to initiate fresh short positions around 1.3100/1.3150 levels, with protective stop above 1.3260 at least. Only a break above 1.3186 would delay matters further. The next in-line resistance is seen towards 13500 levels respectively.
Technical Analysis Team
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