GBPUSD has managed to extend its Wave B corrective rally towards 1.3280 mark today. The structure still looks constructive for bears until prices stay below 1.3500 handle going forward. High probability remains for a bearish turn from here and push below 1.2675 lows.
GBPUSD has been unfolding a corrective drop at a larger degree since September 01, 2020 highs at 1.3488 levels. The currency had initially dropped through 1.2675 lows, terminating Wave A of the proposed A-B-C drop. The rally since 1.2675 lows could be termed as potential Wave B.
Once complete, we can expect GBPUSD to reverse lower again towards 1.2675 and beyond. The fibonacci 0.618 retracement of the earlier rally between 1.1414 and 1.3500 is seen towards 1.2200 mark. High probability remains for a push through 1.2200 levels before turning higher again.
Alternately, a push above 1.3488 would open doors towards 1.3550 at least before finding some resistance. If the alternate unfolds, GBPUSD could turn bullish for the short term at least. Having said that, please note probabilities remain less for the alternate count.
GBPUSD faces immediate resistance around 1.3488 levels, while intermediary support comes in around 1.2850/60 levels respectively. A push below 1.2850 will confirm that a meaningful top is in place and that bears are back in control.
GBPUSD continues to remain a candidate to be sold on rallies from here. Bottom line for the bearish structure to hold is that prices should stay below 1.3500 mark. Watch out for a bearish signal from current levels.
Short against 1.3500, targeting below 1.2200