GBP/USD: wave analysis

The pair can fall.

On the 4-hour chart, the downward correction of the higher level develops as a wave (2). Locally the wave C of (2) is forming, within which the third wave of the lower level iii of C has formed as a momentum, and the upward correction iv of C has ended. If the assumption is correct, the pair will fall to the level of 1.2660 within the wave v of C. The level of 1.2932 is critical and stop loss for this scenario.

Main scenario

Short positions will become relevant during the correction, below the level of 1.2932 with the target at 1.2660. Implementation period: 5–7 days.

Alternative scenario

The breakout and the consolidation of the price above the level of 1.2932 will let the pair grow to the levels of 1.2997–1.3078.

Trade

Scenario

Timeframe Weekly
Recommendation SELL
Entry Point 1.2880
Take Profit 1.2660
Stop Loss 1.2932
Key Levels 1.2660, 1.2932, 1.2997, 1.3078

Alternative scenario

Recommendation BUY STOP
Entry Point 1.2940
Take Profit 1.2997, 1.3078
Stop Loss 1.2890
Key Levels 1.2660, 1.2932, 1.2997, 1.3078