GBPUSD seems to have carved a meaningful top around 1.3483 levels. Further, the currency has managed to drop through 1.2760 levels before pulling back. It is seen to be trading around 1.2800 handle for now and bulls might be preparing to push higher.
GBPUSD probable short term wave structure is as follows: The currency has managed to drop from 1.3483 highs through 1.2760 lows since September 01, 2020. This could be marked as potential Wave A (not labelled here), within the proposed A-B-C corrective drop.
GBPUSD bulls might be carving a counter trend rally towards 1.3200 mark to terminate potential Wave B. Also note that 1.3200 zone is also the fibonacci 0.618 retracement of the drop between 1.3483 and 1.2760 levels respectively.
If prices managed to reach there, probability remains high for a bearish turn which could push prices towards the 1.2200 levels, as Wave C progresses. If the above proposed structure unfolds, GBPUSD should stay below 1.3483 and turn lower from around 1.3200 levels.
Immediate interim support is seen towards 1.2750/60 levels, while resistance is strong toward 1.3000 mark. A push through 1.3000 handle would confirm that bulls remain in control and poised to push through 1.3200 levels, going further.
Traders might want to play the counter trend rally by initiating long positions now, keeping stops below 1.2750 and potential target towards 1.3200 levels respectively.
Technical Analysis Team
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