The GBP/USD made a strong bearish bounce at the 23.6% Fibonacci retracement level and resistance of the downtrend channel (red). The GBP weakened strongly after the resignation of two senior Cabinet ministers over the Brexit process.
For the moment though a larger bullish WXY (purple) correction within wave 2 (pink) seems the most likely. The wave X would become less likely if price continues to show very strong bearish momentum, otherwise the Fib levels of wave X could provide support for a wave 2 retracement.
The GBP/USD made a strong bearish reversal after completing a bullish wave 5 (green) of wave C (blue). The bearish drop is probably a wave A (blue) of the anticipated wave X (purple) correction. Any bullish bounce is probably going to find resistance at the Fib levels of wave B vs A, which could cause price to fall for wave C.
