GBP\/USD has dropped sharply, with price action consistent with a bearish impulse under Elliott Wave analysis. A break below the lower trend line of a bearish base channel is framed as a potential trigger for acceleration into wave three, which is typically an extended phase of the move. On that basis, the next downside zone being monitored is 1.3150\u20131.3000.<\/p>\n\n
The analysis also allows for a wave-four pullback, or another corrective bounce within the broader decline, before any continuation into wave five. Overhead, resistance is placed between 1.3270 and 1.3360. A recording of a prior webinar discussing GBP\/USD and other markets is referenced, and the piece is authored by Gregor Horvat, a Slovenia-based Forex participant since 2003.<\/p>\n\n
We see a strong bearish impulse unfolding for GBP\/USD, signaling that derivative traders should prepare for a drop toward the 1.3150 to 1.3000 range in the coming weeks. This downward momentum is gaining traction as the currency pair breaks below its key base channels, indicating a powerful wave-three acceleration. To capitalize on this trend, we suggest establishing short positions or purchasing put options on corrective rallies.<\/p>\n\n
This bearish technical setup aligns with recent economic shifts, including the Bank of England’s recent move to lower its benchmark interest rate to 5.00% to combat cooling inflation. Historically, when the British pound breaks below major base channels during monetary easing cycles, the market often experiences rapid declines of 1.5% to 2% within a few weeks. We believe utilizing bearish put spreads will allow traders to limit their risk while positioning for this projected downward move.<\/p>\n\n
However, we must remain prepared for short-term wave-four corrective bounces before the market resumes its downward trend. Strong resistance is currently concentrated between 1.3270 and 1.3360, which serves as a strategic zone for placing sell-limit orders. We should monitor these resistance levels closely to refine our entry points before the market makes its final move lower.<\/p>\n\n\n\n