The strength of the GBP/USD bearish decline is indicating that it could fall much more. The angle of price action is typical for an internal wave 3 of wave 3, which means that traders can expect bearish continuations within waves 5 of 3. This is why the wave outlook has been changed compared to yesterday: currently price is still in a larger wave 3 (purple) rather than a completed wave 3 at the recent low (now blue wave 3). The speed of the fall and the break below round level 1.2250 indicates that the next support level is only found at the psychological level and previous all time low at 1.20.
The GBP/USD dropped 300 pips in a matter of hours. If a correction does take place, then a continuation is likely to occur. A small bear flag pattern for instance could be enough for price to continue with a new low and continue towards the Fibonacci targets. The GBP is in a free fall and likely to push lower unless Brexit news appears that would support the GBP.
