Gbp/Usd: Downside Not Quite Exhausted

Pattern and Price: Waiting for a Definitive Reversal

The Pound reached the typical W.5 end-of-wave target zone on Thursday, then made a lower low on Friday. This failure to reflect strongly bullish pricing pressure leaves open the possibility that price may move lower to complete w.5:3 closer to 1.7477 than to Friday’s close at 1.7657.

Multiple-Timeframe Momentum: Turning Bullish

Imminent bullish reversals on the both the weekly and daily stochastics signal that bias is shifting to bullish: price is approaching a multiple-timeframe low that should be followed by rising prices over the next few days and even weeks. However, the bearish reversal on the 240-minute stochastic indicates that price could move lower over the next several hours or even day.

Implications: The Pound May Move Lower Before Rallying

Bullish momentum, pattern, and price across timeframes have not yet fully aligned, signaling that price may move lower for a brief period. A break above 1.7859 on heavy bullish volume will confirm that W.5:3 is complete and should be followed by higher prices over the next few days or even weeks.

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