GBP/USD Technical Analysis

• GBP/USD daily chart made a bearish breakout
• A bullish bounce at the support trend line could start an ABCDE triangle pattern
• A bearish bounce at the resistance could mark the end of the wave E
• The bears remain in control below 1.40.

Daily Chart GBP/USD

1. The daily chart seems to be under bearish pressure - unless price action breaks above the current resistance (orange lines and box).
2. Price action is now close to testing the support trend line (green).
3. A bullish bounce at the support could create an ABC pattern (blue arrows) back to the resistance line (orange).
4. A bearish bounce at the resistance (red arrows) could confirm a bearish ABCDE (pink) triangle pattern.
5. Price needs to break below the support (green) for a bearish breakout (red arrows).
6. An immediate bearish breakout could indicate a downtrend (orange arrows).
7. The first bearish target is the round psychological level at 1.35.
8. Further bearish targets are located at 1.34, 1.33 and 1.3250.

4 Hour Chart GBP/USD

1. The support zone could create a bear flag chart pattern (orange arrow).
2. A test (red arrow) of the 88.6% Fibonacci retracement level is expected due to the strong bearish momentum.
3. A bullish bounce (blue arrows) at the 88.6% Fib could create a wave D-E (pink) pattern.
4. A break below the bottom and 100% Fib level, however, invalidates the ABCDE triangle pattern.
5. In that case, an immediate bearish breakout and downtrend is taking place.
6. A break above the top of wave A and C indicates that a bearish triangle pattern is probably not taking place.
7. A break above the resistance trend line could also indicate a bullish triangle chart pattern, rather than a bearish triangle chart pattern.