GBPUSD seems to have carved a potential top just below the 1.3200 resistance. It is seen to be trading around 1.3025 levels for now and is looking poised to produce a meaningful drop towards the 1.2100 handle over the next few trading sessions.
GBPUSD had dropped to 1.1414 levels in March 2020 and since then, bulls have been in control. The currency pair has managed to print a series of higher highs and higher lows through 1.3186 levels recently. Bears should be inclined to take control from here.
GBPUSD wave counts are suggesting that a 5 wave impulse rally was complete either around 1.2800/10 or is complete at 1.3186 mark. Under normal guidelines, an impulse wave is followed by a corrective wave in the opposite direction though.
If the proposed structure is correct, GBPUSD might be preparing to produce a corrective wave, which could drag prices lower towards 1.2100 mark. Also note that the fibonacci 0.618 retracement is seen to be passing through 1.2100 levels as seen on the chart here. High probability remains for a bullish reversal, if prices manage to reach there.
Alternately, GBPUSD could still print another high around 1.3200 zone before finding resistance. Either way, the currency is set to produce a corrective drop towards the 1.2100 handle. The previous Wave 4 termination is also seen towards 1.2100 levels.
GBPUSD looks good to sell on rallies towards 1.2100 handle over the short term.
Short against 1.3200, targeting 1.2100