Bearish Correction on the GBP/USD Nearing Crucial Decision Point

The current situation on the British Pound to American Dollar (GBP/USD) pair is quite fascinating. We are witnessing a bearish correction, which has taken the shape of a wedge marked by green lines. Interestingly, this correction mirrors a previous one in June, both with a depth of around 250 pips, as indicated by the yellow rectangles. At present, the price is testing an orange horizontal resistance level that has oscillated between acting as support and resistance, highlighted by a black rectangle. This area is crucial for the next move.

If the price manages to break above the orange resistance and the upper green wedge line, it would signal a strong buy opportunity. This would turn the black rectangle into a false bearish breakout, indicating potential for a significant upward movement. The convergence of these signals—breaking the resistance, ending the correction pattern, and confirming a false breakout—typically suggests a robust bullish trend.

Traders should keep a close eye on this setup, as a successful breakout could trigger substantial gains. Conversely, failure to break the resistance might mean the continuation of the bearish correction. The market’s response today will likely provide clear direction for GBP/USD in the near term.

Source: https://www.axiory.com/analytics/technical-analysis/bearish-correction-on-the-gbp-usd-nearing-crucial