GBPUSD is seen to be drifting sideways carving a flat structure as lower degree wave iv around 1.3950/60 levels. Further, it is also testing the backside of its support turned resistance trend line and is expected to reverse lower anytime soon.
GBPUSD bears might remain inclined to drag lower towards 1.3750/55 marks, which is Fibonacci 0.618 extension and potential wave v termination as marked on the 4H chat here. The wave structure remains constructive for bears, going forward.
Also, note that the intermediate trend line support trend line would also break if prices drop below 1.3750 marks. This would open doors towards 1.3200 lows as marked on the chart view. A drop towards 1.3750 will also terminate the first impulse wave.
Ideally, GBPUSD might produce a counter-trend rally toward 1.4100 zones, before reversing lower again. Potential downside targets remain 1.3200 and 1.2675 levels in the next several weeks. The currency had managed to rally in 5 waves since 1.1414 lows registered in March 2020.
GBPUSD bulls managed to terminate Wave 5 around 1.4242 marks recently. If the above structure holds well, a meaningful corrective drop might be underway towards 1.2675 and further. Bears need to hold below 1.4242 for the bearish structure to hold.
GBPUSD remains a sell on rallies candidate until 1.4242 remains intact. Also, watch out for 1.4100 levels (past support) to provide resistance going forward. It would be a good place to sell on a pullback rally. Bears continue to remain in control for now.
Finacademy Technical Team
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