FX.co ★ Konnect2fx | GBP/USD

I expected Wednesday's downward maneuver, yet I must note that they failed to break the local H4 downside target of 1.3399. I observe that such a sharp upward pullback, coupled with today's continuation, could potentially signal the end of the first corrective downward wave on the H4 timeframe. I believe this development means I now need to see another distinct downward wave to successfully break the structure of the prior upward wave originating from 1.3356. I see there is a lot of technical debt concentrated in that area from the previous price action, and I think this debt needs to be resolved through a decisive move. I honestly felt that by the close on Wednesday, we should have moved lower, provided the high of 1.3533 was not breached. I am considering the possibility that they might simply be looking to retest the upside target zone of 1.3490, which was broken during the initial decline, and I view the nearby high of 1.3512 as a key resistance level within that retest

I anticipate that from the 1.3490-1.3512 supply zone, we will most likely go for a retest of the debt main daily balance area before moving south. I am specifically looking for a move towards the 1.3350 area, plus or minus, as I aim to take away the debt from the pre-market low of 1.3331. I find this scenario particularly compelling since, on Wednesday, I also noted they executed a bearish test of the Bollinger Band average. I understand that sustained growth following such a bearish test is generally a low-probability outcome in technical analysis. I further strengthen my bearish bias by considering that growth is an especially unlikely option following bearish tests of the main daily balance area, which acts as a significant gravitational point for price. I am therefore preparing my strategy around the premise that this current upward pullback is a corrective move within a larger bearish structure, not a reversal. I will be watching the cited resistance zone very closely for signs of rejection and the resumption of the downward trend I am expecting. I need to see conviction in the selling pressure to validate my count and to finally clear the accumulated debt from the earlier bullish wave, which I believe is crucial for the next leg down to materialize properly. I remain patient but convinced that the path of least resistance, following this retest, will be downward towards the mentioned targets.