GBP/USD Falling Wedge Reversal Pattern Challenges 1.34 Support

Forex Trader, Analyst, Educator • May 23, 2018 at 5:12 AM EDT

GBP/USD

4 hour

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The GBP/USD made a strong bullish rally yesterday which approached the 1.35 resistance level. Price is now testing the support trend line again (green) but the price pattern is starting to resemble a falling wedge chart pattern. Price would need to break below the support zone of 1.3380-1.34 before the downtrend is able to continue whereas a bounce at support could indicate a potential bigger retracement within wave 2 (pink).

1 hour

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The GBP/USD could be building a WXY correction pattern (purple). A bearish breakout could see a potential continuation lower towards 1.3250-1.33 whereas a bullish breakout could retrace back to the Fibonacci retracement levels of wave 2 (pink).

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