GBP/USD Bear Flag Pattern at Downtrend Channel Resistance

Forex Trader, Analyst, Educator • Apr 25, 2018 at 4:13 AM EDT

The GBP/USD made a bullish retracement back to the resistance trend line within the larger downtrend channel.

GBP/USD

4 hour

The GBP/USD made a bullish retracement back to the resistance trend line within the larger downtrend channel. A bearish bounce at the channel resistance could send price lower within a potential wave 1 (or A) but a bullish breakout, however, could indicate the start of a larger correction within wave 2 (or B).

1 hour

The GBP/USD made a mild correction which looks like a bear flag chart pattern. This bear flag is often a continuation pattern and could be part of wave 4 (brown). A bearish breakout could send price lower and extend the bearish momentum towards the Fibonacci targets of wave 5. Eventually, a bullish retracement could occur and price will make a larger bullish correction. For the moment, the bearish pressure could take price down for a new lower low.

Disclaimer:

The opinions in this article are for informational and educational purposes only and should not be construed as a recommendation to buy or sell the stocks mentioned or to solicit transactions or clients. Past performance of the companies discussed may not continue and the companies may not achieve the earnings growth as predicted. The information in this document is believed to be accurate, but under no circumstances should a person act upon the information contained within. We do not recommend that anyone act upon any investment information without first consulting an investment advisor as to the suitability of such investments for his specific situation.