GBPUSD seems to have carved a meaningful top around 1.3483 mark. The currency had reversed sharply there after giving up more than 700 pips by last Friday. It is seen to be trading around 1.2860 levels as we write the article, and might print yet another low towards 1.2650 mark.
GBPUSD probable wave structure is as follows: The currency had dropped through multi-year lows towards 1.1414 mark in March 2020. Since then, it has remained in control of bulls and managed to carve a series of higher highs and higher lows.
The rally could be seen as a larger degree A-B-C as labelled here. The important event to note here is GBPUSD has almost taken out a major resistance at 1.3500 handle. If that is taken into consideration, bulls have clearly registered themselves and are here to stay for long.
Having said that potential remains for a bullish trend reversal as well. Either way, GBPUSD might be setting up for a meaningful corrective drop towards 1.2200 handle, before deciding on further direction. Bears might remain in control in the near term.
Also note that fibonacci 0.618 retracement of the entire rally between 1.1414 and 1.3483 is also seen towards 1.2250 mark. Hence high probability remains for a bullish turn if GBPUSD managed to drop through those levels, going forward.
Traders might be preparing to sell on a pullback rally towards 1.3200, with a protective stop above 1.3500 and projected take profits towards 1.2200/50 levels, going forward.
Technical Analysis Team
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