FX.co ★ dusty24 | GBP/USD

GBPUSD currency pair - D1 chart. After a three-wave up cycle, the price made a downward correction. It formed a bullish formation called two sticks, where the first wave equals the third in size. A very common phenomenon especially on the pound because it is the most technical. The second stick broke above the previous significant high and, of course, there was a selling zone there, especially at the edge of the stick. For several days in a row the price ground at the top, not deciding to fall, it was simply accumulation and then the expected decline finally occurred. The CCI indicator also confirmed this scenario by exiting downward from the upper overbought zone. And on the weekly timeframe this indicator already wants to exit the upper zone downward. I assume the decline will continue, but a pullback upward is expected first because the price has hit the horizontal support level 1.3538. It won't be easy to break it downward, so initially a rise is expected as if a second wave of the smaller four-hour period. There you'll need to monitor the end of that second wave on lower timeframes and enter short in anticipation of a move in the third wave. If everything goes according to plan, by catching the pullback you can ride the down wave straight to the ascending line that can be drawn here along the lows of the waves. So what will happen here is that after the rising three-wave structure, a complete cycle of two sticks, a similar cycle is expected. Only not as large, but corrective, also consisting of two sticks. They pushed the first one down, and then the price got stuck and began to stall. The support level 1.3538 did not provide much support and the price, having settled below it, long stalled near the ascending line. We waited for the Fed rate decision and plunged down like a stone. And in general across the market the US dollar was strengthening against major currencies. They updated the low of the previous up wave; that was a potential buying zone. There was a bullish divergence on the CCI indicator. High probability of a correction toward the 1.3350 area. There also runs a big line here — the lower line of a large formation, a contracting triangle. They tried to break that line, but it is still holding up quite well and a rise is still more likely.