GBP/USD Bullish Reversal And Breakout Aiming For 1.40 Target

The GBP/USD made a bullish reversal at the 1.2820-50 support zone. This was indicated and expected in our most recent EUR/USD and GBP/USD video from yesterday.

What is the main target for the Cable? Let’s review the Fibonacci levels and wave patterns.

Price Charts and Technical Analysis

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The GBP/USD made a bullish bounce around 1.2830. This is the 21 ema zone and 38.2-50% Fibonacci levels of wave 4 (pink). 

Price action is now breaking above the 21 ema zone. The current 4H candle needs to close relatively near to the candle high to confirm a strong breakout.

  • A strong breakout is expected to send price action higher (green arrows) within the uptrend channel (green lines).
  • The main target is the Wizz 8 and round level at 1.40.
  • This target could indicate the end of the uptrend as price action completes a wave 5 (pink) of wave 5 (purple).
  • A reversal pattern (red arrows) could take place via a head and shoulders chart pattern (orange boxes).

On the 1 hour chart, price action made a bearish retracement via the downtrend channel. 

  • Price action bounced (green box) at the long-term moving averages of the 1 hour chart and the bottom of the downtrend channel.
  • It then created a strong push up followed by a higher low. The third swing up was an impulsive push (light blue arrow) as expected.
  • The retracement completed an ABC (grey) pattern within wave 4 (pink).
  • Now price action could push higher (green arrow) if the breakout is strong.
  • A bull flag pattern (grey arrows) could emerge followed by another new high (green arrows).
  • The uptrend remains valid (red circle) as long as price action does not enter below the support zone (blue box) and top of wave 1 (grey).

The main target is the 1.40 round level.

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The analysis has

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