SHORT ANALYSIS: GBPUSD: More Downside To Go

After watching the latest price action. I have revised my wave count on this pair to reflect a more bearish outlook for now. The last trade I had posted (see Related Ideas: "TRADE: GBPUSD: BUY@1.52200 Hold The Presses! A clear buy! G-Zone") in which I had used a more bullish outlook resulted in a -59 pip loss. More importantly, the price action that invalidated that trade confirmed that there is more downside coming in this pair. How much more? Well, according to the scenario I am posting, not that much more before we get some retracement. But on a larger picture, there is MUCH MORE downside to come before we may get to see that long-awaited wave (C) up that will propel prices skyward. Given this wave count and scenario, if prices do follow my outlook, we are still in for months of corrective price action ahead on this pair.

DAILY CHART - Overview Of The Scenario

THE PATTERNS
There are 2 POTENTIAL patterns that are of relevance to this bearish scenario. One is a bullish butterfly and the other a bullish bat. On the main chart above, you can see a closeup of the D point completion of the butterfly. What you can also see is that there is a AB=CD pattern that also finishes there. And there is confluence with the fib extensions of the previous wave (a) up at the 1.414 extension as well. So this butterfly completion could mark the end of wave (b) of the larger wave B one degree higher.

On the DAILY chart, you can see that there is a POTENTIAL bullish bat pattern also, This bat would have its' completion point almost right at the .886 retrace of the entire move up from the beginning of this corrective phase. This would put the completion right in the G-Zone which is a high probability reversal area. This would make sense since many times, prices will retest a major top or bottom before moving on. In this case, price action,will retest the major bottom lows before continuing back up in the wave (C). So if prices do follow this scenario, I will be very, very interested when prices complete that bat!

MY TRADE PLAN
There is a high probability that prices will complete this butterfly pattern as there is bearish price action currently and that by breaking the recent lows (see chart) and also a minor TL (see on chart), it forced me to readjust my wave count to what you see in the current chart. By this price action, according to my wave count if correct, the current down trend can only be a wave (b) down and it is not finished. Should finish at the butterfly completion.

Where prices are currently to that butterfly completion is a good +190 pips so there is still good pips to be had. I will go SHORT on this pair to the completion of that butterfly. Stops will go above the subwave b (blue) of this current down trend.

*DISCLAIMER:
Please keep in mind that I am not giving any trading signals or trade calls here. Only providing my own trade thoughts for your benefit and insight as to my trading technique and style. Please don't ask if you should or should not take the trade or ask for stop loss and take profit levels. Any SL or TP given on my trades are my own I have used for my trade and are not recommendations for you to use. If you are not sure, then you do not have a trading plan for yourself in place. I suggest you make one before you continue to do any trading!

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