The GBP/USD broke above the resistance of the downtrend channel (dotted red) and could be preparing for a larger bullish correction. The reversal would become more likely if price is able to break above the previous tops (orange) which could indicate the completion of the wave 1 (pink) and the start of the wave 2 (pink).A bearish breakout however could indicate a continuation towards the Fibonacci targets of wave 5 (purple).
The GBP/USD is still respecting the38.2% Fibonacci level of wave 4 (green), which means that this wave pattern could still be ongoing. Price will need to break above the resistance (red) or support (green) trend lines before the next direction is known. Downtrend is still valid but price is showing a significant pause which increases the chance of a reversal. It mostly depends on the breakout direction.
