GBPUSD might have resumed lower towards 1.1900/1.2000 levels to complete the corrective that had begun since 1.2800 highs. Bears are looking poised to remain in control from here and a break below 1.2500 would be encouraging.
The probable wave counts are as follows. GBPUSD drop from 1.2800 through 1.2250 can be sub-divided into 5 waves. The structure is that of a potential leading diagonal, marked as Wave A on the chart here.
As discussed earlier, a 5 wave structure (Motive Wave) is usually followed by a 3 wave structure (Corrective Wave) in the opposite direction. GBPUSD counter trend rally towards 1.2670 was corrective (3 waves).
Also note that the counter trend rally had terminated just above the fibonacci 0.618 retracement of Wave A, seen around 1.2600 levels. This has been labelled as potential Wave B termination on the chart here.
If the above is correct, GBPUSD should ideally stay below 1.2670, Wave B termination point and turn lower towards 1.2250 and 1.2000 respectively. Immediate price resistance is seen around 1.2800, while intermediary support is around 1.2250 levels respectively.
Traders might have initiated fresh short positions around 1.2600/50 levels yesterday. The protective stop loss would stay above 1.2800 mark and potential take profits around 1.2250, 1.2000 and further. Only a break above 1.2800 would change the structure.
Technical Analysis Team
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