GBP/USD: A Bearish Reversal?
GBP/USD is in bullish mode and reached our projected zone for this week; 1.5800-1.5900 which is actually a very important resistance zone in combination with the wave principle and Fibonacci levels.
As you can see on the chart we are tracking a huge wedge pattern called an ending diagonal which usually predicts a very strong reversal. With that said, we are keeping an eye on potential sell-off on this pair from current resistance zone. This sell-off can happen soon if we consider that prices are in late stages of wave 5) now, testing 61.8% Fibonacci projection compare to wave 3) and also approaching 161.8 % extension of wave 4).
However as always only price can confirm the direction you anticipate. In other words, we need a five wave decline from the highs to confirm further bearish waves for the pair. Only then trader could be interested in short opportunities, until then stay aside.
Forex Analysis by Gregor Horvat at ForexPros. com
