The overall trend for the pair continues to be bearish. A bearish impulse structure is currently dominating. With the completion of the major wave (A) and the subsequent (B) contracting triangle correction, sub-waves 1-2-3-4 have been fulfilled.
Major: (A)-(B)-(C); Minor: 1-2-3-4-5; Triangle: A-B-C-D-E structure. Currently, wave 5 (Bearish) which is a sub-wave of wave (C) is active.
Critical Support : 1.31595 - 1.30265 (Critical support zones (1.31595 Confirm Level))
Critical Resistance : 1.33462 - 1.34500 (Immediate resistance areas)
Target Zones : 1.30265 - 1.28289 (Fib 1.0 and Fib 1.618 projection zones)
Invalidation : 1.33462 (Red dashed line, invalidation of bearish count)
Primary Scenario : As long as the price remains below the 1.33462 resistance (invalidation level), the decline is expected to continue towards the Wave 5 target area of 1.28289. Sustained closes below the 1.31595 confirmation level remain the main dynamic strengthening this bearish impulse.
Alternative Scenario : A strong, high-volume breakout above 1.33462 will invalidate the current bearish count. In this case, it would indicate that the correction has turned into a complex structure (WXY), bringing new bullish targets to the table. Monitoring the depth of wave 4 is highly crucial here.
Why is This Analysis Critical?
After wave (B) completed as a contracting triangle, the bearish wave 3 showed a strong extension. Our expectation is the testing of the projection levels 1.00 (1.30265) and 1.618 (1.28289) for Wave 5.
Elliott Wave analysis, rather than just drawing random support and resistance lines, explains the nature of price movements (whether they are impulsive or corrective). This gives GBPUSD traders a clear view of which market phase they are in.
Which Elliott wave is GBPUSD currently in?
GBPUSD is currently inside the minor wave 5, which is a sub-wave of the major downward wave (C).
What are the target levels for the bearish trend?
According to Fibonacci extensions, the main expected targets for Wave 5 are 1.30265 (Fib 1.0) and 1.28289 (Fib 1.618).
Under what condition is the bearish scenario invalidated?
The bearish expectation is invalidated if the price breaks upwards through the 1.33462 invalidation point.
On the GBPUSD H4 chart, the bearish impulse is projected to continue as long as the price stays below 1.33462. Risk management should strictly consider the invalidation point and monitor the confirmation level.
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