- GBP/USD is trading 0.77% lower on Monday.
- The Feb extension and retracement match up at the 76.4% retracement.
GBP/USD 4-hour chart
GBP/USD has been selling off recently after the recent trendline retest. Elliott Wave analysts will be very interested in the Fib confluence lower down close to the 76.4% Fibonacci. At the moment the price is stalling at the wave low but if there is a break the targets lower down seem strong.
At the moment, the bulls have found support at 1.2760. Looking at the chart the red circle illustrates the point where the 200% and 76.4% meet. The thing that makes it stronger is the support level from the consolidation in mid-July.
The indicators are also confirming the bearishness. The Relative Strength Index is just pulling away from the overbought zone. The MACD is giving the stronger signal as the histogram is firmly in the red and the signal lines have just crossed the mid level.
This looks like a confirmation for a trend change to the downside. The key now is the break of the previous wave low at 1.2760 but keep an eye on the 61.8% retracement as it can sometimes be a sticky Fib zone.
Credit: FX Street