UK Markets closed

GBP/USD Testing Key 1.2950 Support Zone of Triangle

Chris Svorcik

Dear traders,

the GBP/USD is testing the Fibonacci retracement support levels of wave C, which is a key decision zone for a bullish reversal or bearish breakout.

4 hour chart

The GBP/USD breakout below the 100% Fibonacci level and bottom of wave A (green) invalidates (red x) the expected triangle chart pattern and could indicate a bearish ABC zigzag pattern. A bullish bounce, however, could confirm (green check) the triangle and indicate a 3 wave up within the expected wave D (green).

1 hour chart

The GBP/USD needs to stay above the 88.6% Fibonacci retracement level to keep the triangle pattern as the most likely scenario. A break below the 88.6% Fib makes the triangle less likely and a push below the 100% level fully invalidates it. A bullish ABC (orange) pattern could take place within wave D (green).

Good trading,
Chris Svorcik

The analysis has been done with SWAT method (simple wave analysis and trading)

This article was originally posted on FX Empire

More From FXEMPIRE: