The GBP/USD is stuck between the support and resistance trend lines. There is also 144 ema support and 21 ema resistance holding it back. Is the Cable building a triangle pattern?
4 hour chart
The GBP/USD bearish breakout below support could in any case confirm a larger correction. Another bullish bounce at the support trend line would increase the chances of an ABCDE (purple) triangle pattern taking place. The bearish correction could also be an ABC zigzag pattern. In that case, price needs to break the support trend line (red arrows).
Alternatively, a bullish breakout (blue arrows) would change the dynamics and invalidate (red x) the currently expected wave pattern. A bull flag pattern after the breakout is important to avoid false breakouts.
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
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