Waiting for GBPUSD's 4H Bullish Correction to be Completed
The bullish correction emerged from the latest dip. This appears to have begun establishing a Double Bottom pattern, which is typically perceived as a trend reversal pattern. However, it would take a decisive breakout above 1.38200 and the 200-day MA (in purple) to confirm the beginning of such a new uptrend.
On the other hand, a potential rebound from the currently converging 50-day MA (in green) and 100-day MA (in blue), which serve as floating resistances, would likely demonstrate the end of the bullish correction. Such a rebound would invalidate the bullish expectations connected to the Double Bottom and would reinstate the broader bearish expectations relating to the Elliott Wave Theory.
The price action is currently in the process of establishing a broad 1-5 impulse wave pattern (in red), which substantiates the primary expectations. Namely, that the price action is due to complete the final impulse leg of the pattern (4-5), which could drive the price action lower towards the next psychological support - the 23.6 per cent Fibonacci retracement level at 1.35765.
On the other hand, a potential rebound from the currently converging 50-day MA (in green) and 100-day MA (in blue), which serve as floating resistances, would likely demonstrate the end of the bullish correction. Such a rebound would invalidate the bullish expectations connected to the Double Bottom and would reinstate the broader bearish expectations relating to the Elliott Wave Theory.
The price action is currently in the process of establishing a broad 1-5 impulse wave pattern (in red), which substantiates the primary expectations. Namely, that the price action is due to complete the final impulse leg of the pattern (4-5), which could drive the price action lower towards the next psychological support - the 23.6 per cent Fibonacci retracement level at 1.35765.