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

GBP/USD 11.03.2021 4 hour chart

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:

  1. The bearish 5 waves completed a wave A (red).
  2. A larger bearish ABC (red) pattern is expected.
  3. The push up is probably an ABC (purple) within wave B (red).
  4. This ABC pattern remains valid as long as price stays below the top (red circle).
  5. 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).
  6. 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.

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

GBP/USD 11.03.2021 1 hour chart

Good trading,

Chris Svorcik

The analysis has been done with the indicators and template from the SWAT method (simple wave analysis and trading). For more daily technical and wave analysis and updates, sign-up to our newsletter

For a look at all of today’s economic events, check out our economic calendar.