The GBP/USD has completed a bearish ABC (green) pattern after 5 waves (blue up). But the bearish retracement is expected to expand into a larger WXY (blue correction).
The GBP/USD is now breaking the support trend line (dotted blue). Price will also need to break below the local horizontal support (green lines) before a clear breakout can be expected. The main target is the 38.2% Fibonacci retracement level of wave B vs A, although price action can even extend its bearishness towards the 50% Fib.
A bullish bounce at support could occur as well. In that case, price will retest the resistance levels first. They are likely to act as a bearish bouncing spot. Only if price is above the break above 1.25 would the current bearish outlook become less likely (red x).
