The current wave patterns on the GBP/USD are suggesting a downtrend continuation but this wave outlook is dependent on how price will respond to the larger daily support level around 1.2420. For the moment bearish pressure is likely to send price lower to test that daily support zone. This remains the most probable situation as long as price stays below the resistance area (dark red).
The GBP/USD seems to have completed a bearish wave 3 (orange) momentum. The current bullish price swing could be a wave 4 (orange) retracement as long as price stays below the Fibonacci levels of wave 4 vs 3. The two most likely scenarios are that price makes a pullback up to the 38.2% Fibonacci or goes sideways (corrective pattern) and then breaks lower.
