If you analyze the recent downtrand through "Elliot Wave Goggles", one might believe that the pair has reached the end of the 3rd impulse wave, will pullback to a previous support/resistance for the 4th wave, and then continue downward for the 5th wave. With this analysis you could either try to collect pips from the pullback of the 4th wave, or the short position...
When looking at the 4H GBP/USD, as the week gets kicked off look for the 01:00:00 candle to close bullish, as that would be the third requirement for a Morning Star set-up (look it up if you're not sure what I'm talking about), it is that verification that we need in order for the pullback to be valid. But that is all that it is, a pullback, and from the looks of...
The candles over the past 12 hours have each had extended wicks aboove the bodies, signaling that this pull back is getting exhausted. Remember, when theres a sharp move (either buy or sell), the pullbacks are caused by traders collecting their profits, before the trend continues.
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Price is currently sitting on a major support in the 110.230 area. If it breaks through and closes below, expect s continued downside trend. It may also bounce back off of the 110.230 support and climb its way back up to the 112.000 resistance area
What I have included on this chart: A fibonacci Retracement
A resistance line at 0.76812
A rising trendline underneath the lows of each swing low
The resistance line and trendline creates a wedge pattern since the end of May unti the present; observing this...
What I have included on this chart is :
An Impulse wave
An equidistant channel
A Fibonacci extension
And A fibonacci retracement from the 1.618 level of the extension
The impulse wave and the fibonacci extension both create a major support level at the ~1.08641 level which has been tested quite a bit recently....
