GBP/USD roller coaster part of wave 4 pullback in uptrend

• GBP/USD is creating an increased price volatility between 1.3205 support and 1.35 resistance zones. That said, price action remains in a solid uptrend

• What is next for the Cable? How can the Elliott Wave and chart patterns help our analysis? Let’s review them all.

• The main question is whether the smaller wave 5 (pink) has already been completed. And for the moment, the answer seems to be no.

The GBP/USD is creating an increased price volatility between 1.3205 support and 1.35 resistance zones. That said, price action remains in a solid uptrend when comparing the moving averages (21 ema above 144 ema above 610).

Price Charts and Technical Analysis

The GBP/USD is building a bullish 5 wave pattern (purple) after a long-term downtrend. The wave 5 could complete a larger wave A (blue) of an ABC (blue).

Because the recent ups and downs are probably part of a wave 4 (pink) retracement. This remains valid as long as price action respects the support zone of the uptrend channel (green).

A break below the support invalidates (red circle) this wave outlook and indicates a deeper bearish retracement. A bullish bounce, however, could indicate one more push up towards the top of the channel around 1.37.

On the 1 hour chart, it is possible to monitor the development of the potential wave 4 (pink). The upside looks like an ABC (orange) that completes wave B (grey). 

A bearish breakout could confirm the wave C (grey). The main target zone is the previous bottom (blue box). 

A bullish breakout followed by a bull flag and another break upwards would invalidate (red circle) the expected bearish wave C.

The analysis has been done with the ecs.SWAT method and ebook.