GBPUSD with a different vantage point
Reading a chart is not so easy. And even so difficult when higher timeframes show a completely different story. That is why top-down analysis has considerable preference among traders.
Monthly view with the TradePips custom indi
It is obvious that the trend has been (and still is) bearish for few years now. But the indicator is starting to signal that the the trend may be nearing the end. But this is not enough to change the long term bias for couple of reasons. Firstly the indicator is quite new and even conceding the benefit of the doubt, no indicator is 100% accurate. Secondly the signals are stronger when there is a divergence between the price and the indicator line pertaining to the expected direction. In this case the blue indicator line is yet to show divergence.
In conjunction with the Elliott wave principle, wave 5 of a motive often shows divergence. Which means this could be just the end of wave 3. This also confirms with the previous Elliott wave forecasts on GBPUSD.
Let us go into the weekly timeframe.
GBPUSD on the weekly shows that there is no clear directional strength. Having said that staying with the current direction, the blue line has the potential to reach the upper black line and vice versa. Regardless of this week, there is more potential for the upside. However, keep in mind that the bigger motive wave in the monthly chart still has wave 5 to come.
The verdict of the Daily chart
Red horizontal lines represents the 4th wave correction. Considering the beautiful Bat pattern that completed last week, the current momentum has shifted bearish. This is also confirmed with the divergence between the price and the blue line. However the red line too is showing divergence in a tiny magnitude. It is fair and safe to say the price is squeezed around the current levels.
In the Elliott wave point of view, the larger structure still has potential to continue as a channel. Perhaps for a huge contracting triangle. For now the structure seems like an ABC flat with an ambiguous B wave (shows signs of a motive wave rather than a corrective B wave.)
Disregarding the bullish sentiment in the weekly chart, one could argue that there is enough evidence in the daily chart to support the case for bearish sentiment. Who knows, this could be the beginning of the huge bearish wave 5 of the monthly trend.