GBPUSD seems to be preparing for a bearish reversal after having print 1.3267 highs on August 19, 2020. The currency had dropped off towards 1.3090 mark before pulling back and is trading around 1.3125 levels for now. Intraday resistance is seen through 1.3180 levels.
GBPUSD had dropped to a multi-year low in March 2020. It looks like the currency has managed to carve a meaningful bottom around 1.1414 levels, and has turned higher. The rally since then has managed to break a strong resistance around 1.3200 mark.
Believe it or not, GBPUSD should be preparing for at least a corrective drop if not a trend reversal from here. We can expect a 3 wave drop towards 1.2100 handle going forward. Immediate resistance is seen towards 1.3267, while interim support is around 1.3090 respectively.
Also note that fibonacci 0.618 retracement of the entire rally between 1.1414 and 1.3267 is also passing through the 1.2100 handle. If prices manage to reach there, high probability remains for a bullish bounce. Also note that Wave 4 of one lesser degree is also seen just below 1.2140 mark. It normally acts as a magnet for the larger degree Wave (2) to terminate.
GBPUSD bears are certainly looking poised to drop from here until prices hold below 1.3267 handle. The currency might produce an intraday rally towards 1.3180/1.3200 mark before reversing lower again. A bearish turn can be expected thereafter.
GBPUSD might have resumed an uptrend since 1.1414 over the long term but it looks bearish in the near term at least. Looking good to sell on rallies through 1.3180/1.3200 levels going forward.
Short against 1.3300, targeting 1.2100