Technical outlook:
The GBP/USD H4 chart has been presented here for a larger picture and slight change in the wave counts as proposed on Friday. The single currency pair is now seen to be targeting 1.3730/40 levels, which is pretty close to the previous price support at 1.3710 levels as shown here. Please note that the entire drop from 1.4375 levels is still unfolding into 5 waves at a lower degree to construct wave (1) of one larger degree. Also please note that the pair looks to have already formed a major top at 1.4375 levels and terminated wave (4) of a larger degree. If the above count holds true, the pair should be heading much lower, unfolding into 5 waves. Looking into the recent wave counts, the pair is into its 5th wave right now and is expected to terminate the same around 1.3740/50 levels. Then we can expect a counter trend rally higher as shown here.
Trading plan:
Aggressive traders prepare to go long again after 1.3740/50 lows with a very tight stop. Conservative traders please remain flat for now and look to sell higher.
Fundamental outlook:
Watch out for the German Consumer Price Index and US PCE Core to be out today between 08:00 AM to 08:30 AM EST.
Good luck!The material has been provided by InstaForex Company - www.instaforex.com