- The GBP / USD is trading just below the dish after being much lower for most of the session.
- The price wave appears to reject the 76.4% Fibonacci retracement.
1 hour GBP / USD chart
GBP / USD spent most of the session in the red but recovered from the 1.2643 low to trade at 1.2730 at the time of writing. According to the British press yesterday, the British government is considering dropping the Brexit negotiations which brought down the pair. Since the opening of the EU session, the sale of green tickets has started and the cable has been restored.
Looking more closely at the chart, there is now a potential reversal situation. Elliott Wave and Dow analysts see the first low as a milestone. Wave 1-2 could set in as the pair rejected the 76.4% retracement. The only way to confirm this is that the bottom of the wave in the red support area is breaking to the downside. If the wave high of 1.2767 is broken, the theory would be invalid.
The GBP was one of the underperformers against the dollar on Wednesday. EUR, CAD and NZD are the outperformers and the pound is quite weak against the peloton. Looking at the indicators, the Relative Strength Index looks positive above the 50 zone. The MACD also looks positive as the histogram is in the green and the signal lines are above the middle zone.
Looking at the structure of the chart, the trend is not as clear as the EUR / USD. The main resistance area at 1.2813 has not been removed, so the price has yet to wave higher higher higher lows higher. Although the pair has made great strides, the uptrend cannot be confirmed until the aforementioned resistance is broken.