Greetings everybody,
people ask for update on GBP. As gold has completed our AB-CD intraday target and now stands around resistance area, waiting for NFP numbers - let's, indeed, take a look at GBP.
Last time we've traded GBP on BoE meeting and rally indeed was good. But on next day situation has changed drastically, showing classical "Buy on rumor sell on fact" performance. Additionally we've got failure upside breakout of triangle, which suggests overall bearish context. It means that our major downside AB-CD pattern is still valid and we're watching for OP target around 1.27 area. At the same time major action should happen next week, or later, because now market stands not too far from daily oversold level. Thus, we suggest that 1.28 level probably should be the floor today, if NFP data will be good enough.
On 4H chart downside action could take the shape of butterfly, which 1.27 target stands precisely around 1.28 area:
On 1H chart we have other multiple targets as well. Now price is coiling around COP, while OP stands at the same 1.28
That's being said overall context looks bearish but today downside potential is limited by oversold area. It makes us thing that if even NFP will be good - hardly GBP drops below 1.28 level.