GBP/USD rose to 1.5817 last week but dropped sharply since then. The development suggests that the corrective pattern from 1.5329 has completed with three waves up to 1.5817. Initial bias remains on the downside this week for 1.5329 first. Break will resume the fall from 1.5929 and target 100% projection of 1.5929 to 1.5329 from 1.5817 at 1.5217. Break will target 161.8% projection at 1.4846. On the upside, above 1.5508 minor resistance will turn bias neutral first. But risk will now stay on the downside as long as 1.5817 resistance holds.
In the bigger picture, medium term fall from 1.7190 should have completed 1.4565. Momentum of the rebound from 1.4565 was relatively weak and the structure is somewhat corrective. Hence, we'd now treat price actions from 1.4565 as developing into a consolidation/correction pattern only. Fall from 1.7190 is viewed as resuming the longer term down trend from 2.1161 and would target 1.3503 and below later.
In the longer term picture, we're sticking on to the view that price actions from 1.3503 are the fourth wave of the five wave sequence from 2.1161. That means, firstly, 1.3503 shouldn't be the end point of the downtrend yet and a new low is expected. However, secondly, as the next fall could be the fifth wave, the breach of 1.3503 could be shallow and brief from long term point of view and we'll then see a more sustainable rebound.
In the bigger picture, medium term fall from 1.7190 should have completed 1.4565. Momentum of the rebound from 1.4565 was relatively weak and the structure is somewhat corrective. Hence, we'd now treat price actions from 1.4565 as developing into a consolidation/correction pattern only. Fall from 1.7190 is viewed as resuming the longer term down trend from 2.1161 and would target 1.3503 and below later.
In the longer term picture, we're sticking on to the view that price actions from 1.3503 are the fourth wave of the five wave sequence from 2.1161. That means, firstly, 1.3503 shouldn't be the end point of the downtrend yet and a new low is expected. However, secondly, as the next fall could be the fifth wave, the breach of 1.3503 could be shallow and brief from long term point of view and we'll then see a more sustainable rebound.
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