FX.co ★ dusty24 | GBP/USD

The currency pair GBPUSD - D1 chart. After a three-wave up cycle the price made a downward correction. A bullish formation emerged called the so-called two sticks, where the first wave is equal in size to the third. A very common phenomenon especially on the pound because it is the most technical. The second stick broke above the previous significant high and there was, of course, a selling zone there, especially at the edge of the stick. For several days in a row the price was churning at the top, not daring to fall, there was simply accumulation and then the expected decline finally occurred. The CCI indicator also confirmed this scenario by moving down out of the upper overbought zone. And on the weekly timeframe this indicator already wants to exit the upper zone downward. I assume that the decline will continue , but first a retracement upward is expected because the price has hit the horizontal support level 1.3538. It won't be able to break it downward that easily and therefore initially a rise is expected as if in the second wave of the lower four-hour timeframe. There one will need to track the end of this second wave on smaller timeframes and enter short in anticipation of movement in the third wave. If everything works according to plan, catching on the retracement one can ride the downward 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 composed of two sticks. The first one went 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 consolidated below it, stalled for a long time near the ascending line. We waited for the Fed interest rate decision and fell like a stone. And overall in the market the US dollar was strengthening against the major currencies. The low of the previous up wave was updated; this was a potential buy zone. There was a bullish divergence on the CCI indicator. High probability of a correction toward the 1.3350 area. There is also a big line running here, the lower line of a large pattern — a contracting triangle. They tried to break through this line, but it still holds quite well and an upward move is still more likely.