GBPUSD climbed to the1.2055 high intraday on Friday before hitting resistance and pulling back. The currency pair has carved a Morning Star bullish reversal candlestick pattern over the last three trading sessions as confirmed on the daily chart. It is a potential bullish reversal indication towards initial resistance at 1.2665 at least.
GBPUSD bulls seem to be back in control and will remain poised to hold prices above 1.1875 going forward. The larger-degree wave structure suggests that bears have terminated a corrective wave at around 1.1875, which had begun from 1.4250 in January 2021. Besides, prices are bouncing back right from the Fibonacci 0.786 retracement of a larger-degree upswing.
A high probability remains for a bullish trend reversal from current levels (1.1975) targeting the lows of 1.2600-1.2700 in the near term. Also, note that a push through the 1.2300-1.2400 immediate resistance will confirm that the bottom is in place at 1.1875. Only a break lower will nullify the suggested bullish structure and delay matters further.
Going forward:
GBPUSD's bigger picture is looking encouraging for bulls with a larger-degree upswing between 1.1400 and 1.4250 being retraced towards the 1.1875 mark. If successful, the Fibonacci 0.786 bounce could trigger a sharp rally towards 1.2700 and 1.3150 in the next few weeks. The bottom line for the above structure to hold is that prices should stay above 1.1875.
Trading plan:Potential rally towards 1.2700 against 1.1875
Good luck!