GBPUSD fell sharply lower four weeks back after the vote counts for EU membership showed that UK wants to leave the Euro zone. The pair fell to a new low which was technically expected, as you know, since we counted the bounce from 1.3850 as a corrective fourth wave, so the final wave V was in store. As we see now the price made a nice little impulse from the lows, which could be the beginning of a new bullish sequence, meaning that the higher degree decline is completed.
If the price breaks beneath wave C) low, then wave V could still be unfolding.
GBPUSD, Daily
On the lower time frame, GBPUSD spiked up to 1.3480 area last week and confirmed a bullish turn on this pair as we can count clear five waves up from 1.2800 low. We know that a five wave move shows the direction of a trend so more gains are expected to come after the current three waves of retracement seems to have found a support around 1.305, as the price made a minor degree bounce higher and above the upper channel line. We however will still need to see a turn back above red wave B) levels to confirm a bullish continuation for higher prices into wave C/3.
GBPUSD, 4H
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