GBP/USD Bullish ABC Zigzag Aiming At Fibonacci Resistance

The GBP/USD has made a bullish bounce at the 144-233 ema support zone. The higher low and higher high have launched a bullish breakout. 

The bullish trend channel is now the key factor for more upside. Let’s review the 4 and 1 hour charts.

Price Charts and Technical Analysis

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The GBP/USD seems to have completed multiple wave 5s at the recent top. The 5 wave decline (purple) only supports this wave outlook. Let’s review the key zones and patterns:

• The bearish 5 waves completed a wave A (red). 
• A larger bearish ABC (red) pattern is expected.
• The push up is probably an ABC (purple) within wave B (red).
• This ABC pattern remains valid as long as price stays below the top (red circle).
• A break (dotted orange) below the support line (green) of the uptrend channel indicates an early bearish bounce at the 38.2% Fib (yellow circle).
• A break above the 38.2% Fib confirms a deeper bullish break towards the Fibonacci retracement levels. 

On the 1 hour chart, price completed a 5 wave pattern (purple) in wave A (red). Now a bullish ABC pattern could take the price up higher. 

• A bearish breakout below the support line (green) indicates a deeper retracement (yellow circle).
• A break below the bottom indicates that the ABC (purple) pattern is completed sooner than expected (red circle).
• A bounce at the support zone (green box) indicates a push up towards the Fibonacci confluence.

(Click on image to enlarge)