British Pound Technical Outlook

I’ve written recently that “the rally from 1.5800 counts best as a 3 wave rally and 3 wave rallies occur in B or X wave positions, diagonals, and triangles. All of these are possible right now. The decline from 1.6750 can be counted as a 5 (impulse), which favors the expanded flat count in which the GBPUSD will eventually drop below 1.5800. In this case, the leg lower from 1.6750 would be wave i or a (complex). There is the risk of a rally back to at least 1.6300 in order to correct the decline from 1.6750 (RSI divergence favors this interpretation).” It is possible that the rally from 1.5980 is complete as price reversed in the center of the Fibonacci zone. What is worrisome about that interpretation is the structure of the rally from 1.5980, which looks like a 5. As such, the advance may be just wave A of an A-B-C zigzag correction. Fibonacci resistance extends to 1.6450 and the larger bearish bias is valid against 1.6750.