GBPUSD seems to have carved an interim low around 1.2335 early this week. The currency has since rallied through 1.2540 and looking poised to extend further. Ideally, bulls remain in control and GBPUSD should reach 1.2900, 1.3200 and 1.3500 handles going forward.
Structurally, GBPUSD has remained in control of bulls since 1.1414 lows in March. It has carved Waves 1, 2, 3 and 4 (1.2080) as labelled on the chart here. Wave 5 seems to be progressing since 1.2080/1.2100 lows and should be targeting above 1.2900.
Alternately, it is quite possible that Wave 5 might have terminated above 1.2800 handle. In that case, GBPUSD correction could be underway and prices should break below 1.2335 lows. The corrective drop may extend towards 1.2000 handle before the rally resumes.
Immediate short term wave structure suggests that GBPUSD might correct lower towards 1.2400 levels from current price action (1.2520). We can expect a rally thereafter, which could terminate above 1.2600 levels, going forward.
We would still favour the bullish count, which is pointing a rally beyond 1.2900 handle. Only if prices reverse from 1.2650/1.2750, we would consider exiting long positions. Looking at the short term wave structure, GBPUSD is expected to correct lower towards 1.2400/20 before resuming its rally.
GBPUSD remains a good candidate to buy on dips as long as prices stay above 1.2335 handle.
Long against 1.1414, targeting above 1.2900, 1.3200. Stop could be moved higher to 1.2300
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