The GBP/USD made a bullish retracement back to the resistance trend line within the larger downtrend channel. A bearish bounce at the channel resistance could send price lower within a potential wave 1 (or A) but a bullish breakout however could indicate the start of a larger correction within wave 2 (or B).
The GBP/USD made a mild correction which looks like a bear flag chart pattern. This bear flag is often a continuation pattern and could be part of wave 4 (brown). A bearish breakout could send price lower and extend the bearish momentum towards the Fibonacci targets of wave 5. Eventually a bullish retracement could occur and price will make a larger bullish correction. For the moment, the bearish pressure could take price down for a new lower low.
