The GBP/USDdowntrend is now approaching a new quarter level at 1.3250 which is a potentially strong support zone and a new bounce or break spot.
A bearish break below 1.3250 would probably change the current wave pattern and make it more likely that the current bearish momentum is a wave 3 rather than a wave 5. A bullish bounce and more importantly bullish breakout above the resistance trend lines (orange) could indicate a larger retracement.
The GBP/USD ending diagonal is valid as long as the wave 5 (green) is not longer than the wave 3, which means that price should not break much below 1.3250 support. Price is now moving back towards the Fibonacci levels of wave B which could as a resistance spot.
In an ending diagonal, the 5 waves (green) are composed of a 3 wave ABC pattern in each wave. The wave 5 (green) should be the shortest wave of all 5 waves and therefore a break below the 100% Fibonacci target of wave 5 (green) invalidates the ending diagonal wave pattern
