GBP/USD is showing a 5 swing bearish sequence from 12/6 peak (1.277) which favors more downside. The decline from 12/6 peak is unfolding as a double three where wave (W) ended at 1.2198 and wave (X) ended at 1.2432. GBP/USD has since broken below wave (W) at 1.2198 which suggests that the next leg Wave (Y) has already started to the downside. Internal of wave (Y) is unfolding as a double three where wave W ended at 1.2104 and wave X bounce is in progress to correct cycle from 1/5 high (1.2432) before pair resumes lower again towards 1.172 – 1.185 area. We don’t like buying the bounce and expect sellers to appear to push the pair to another low once wave X bounce is complete in 3, 7, or 11 swing. The first 3 swing inflection area of ((w))-((x))-((y)) is 1.223 – 1.225 for potential area where sellers can appear to push the pair to the downside.
GBP/USD Hour Chart