The GBP/USD bullish momentum is showing very strong price action when it broke above the resistance trend line (dotted orange). Price is now approaching a key invalidation level (orange line) for the current wave 4 pattern. A bullish breakout invalidates this wave outlook and could indicate a larger bullish correction.
The alternative wave scenario is a potential bullish 5 wave pattern (light blue). A bullish breakout above the invalidation level could make this pattern more likely. After completing the 5 waves, price could build a bearish ABC correction before moving up again.
The GBP/USD bullish impulse is strong and seems to be a wave 3 (orange). A sideways corrective pattern such as a bull flag or triangle could confirm a wave 4, which would indicate that a bullish continuation within wave 5 is likely.
