GBPUSD might have finally managed to carve a meaningful top around 1.3482 levels yesterday. The currency remained shy of few pips to hit major resistance at 1.3500 handle before reversing sharply. Bears might remain inclined to drag prices lower from here.
GBPUSD had print 1.1414 lows in March 2020, before bulls took control. They managed to carve a series of higher highs and higher lows all through 1.3482 handle. A potential shooting star candlestick pattern has appeared on the daily chart. Had the currency managed to close below 1.3384 mark it would have been an ideal shooting star. Probabilities remain high for a bearish reversal from here.
GBPUSD wave counts have also been readjusted today. The rally from 1.1414 through 1.3482 could be sub divided into 5 waves. A larger degree Wave (1) might be in place around 1.3482 mark and if the proposed counts are correct, a meaningful corrective drop should be underway soon.
GBPUSD has also managed to nearly take out a major resistance around 1.3500 handle. Bulls have clearly registered themselves here and the long term trend might have turned bullish. The entire rally between 1.1414 and 1.3482 could be retraced, before the rally resumes.
Also note that fibonacci 0.618 retracement of the above rally is seen towards 1.2200 levels. If prices manage to drop until that zone, probabilities for a bullish bounce remains high. Immediate support is seen through 1.3000 mark and a break there would be encouraging to bears.
Alternately, GBPUSD could push one last time through 1.3500 handle before reversing. Either way, the currency might remain vulnerable for a drop towards 1.2200 levels, going forward.
Short against 1.3600, targeting 1.2200