Weekly Waves: GBP/USD, Gas and Bitcoin

• Price action is expected to continue its downtrend (red arrows) as part of a wave 3 (yellow). The main targets are Fibonacci at 1.1325, 1.1250 and 1.1175.

• The NGAS chart offers a classic head and shoulders reversal chart (orange boxes).

• The BTC break on the bottom should complete the bullish shallow wave 4 (yellow) and start the bearish wave 5 (yellow).

GBP/USD bears take control and break the bottom

GBP/USD made a bullish retracement to and bearish bounce at the 38.2% Fibonacci resistance level:

1. The GBP/USD bounce at 38.2% Fib indicates a wave 4 (pink) pattern.

2. The price action has now broken below the bottom after a strong bearish decline, which has been labeled as a wave 1 (yellow).

3. Price action is expected to continue its downtrend (red arrows) as part of a wave 3 (yellow).

4. The main targets are the Fibonacci levels of 1.1325, 1.1250 and 1.1175.

5. Finally, a shallow retracement is expected to occur within wave 4 (yellow).

6. The retracement should not break above the previous lows and resistance zones (red boxes).

7. A further decline is then expected within wave 5 (yellow).

8. A bullish push above the resistance levels makes it likely that another wave pattern is valid.

NGAS head and shoulders pattern indicates reversal

The NGAS 4-hour chart shows a reversal chart:

1. The NGAS chart offers a classic head and shoulders reversal chart (orange boxes).

2. The bullish push-up within wave B/2 stopped at the 61.8% Fibonacci level.

3. The bearish decline after the bearish bounce has been very strong and is probably a type of wave 3 (yellow).

4. A mild retracement within wave 4 (yellow) could take the price back to the 23.6% or 38.2% Fibonacci levels.

5. A deeper bullish retracement invalidates the wave 4 pattern (yellow).

6. A bearish continuation targets the Fibonacci targets below.

7. If the price action only reaches the -27.2% Fibonacci target, it is most likely a wave C ([pink). If price action goes to the -61.8% Fib, then it could be either a wave 3 or C.

8. A break below the -61.8% Fibonacci level indicates a wave 3 (pink).

BTC/USD breaks low and prepares for decline

Bitcoin (BTC/USD) is breaking the bottom and low for a continuation of the downtrend:

1. The BTC/USD bulls are disappointed yet again after a bullish rally was unable to break above the resistance zone.

2. The break of the bottom should complete the bullish, shallow wave 4 (yellow) and start the bearish wave 5 (yellow).

3. The main target is the -27.2% Fibonacci target around $12k with an important zone around the round level of $15k.

4. The wave 5 (yellow) could move lower within a falling wedge reversal chart pattern (orange lines). 

5. A strong bullish bounce is needed to confirm the start of any reversal (blue arrows)

6. The wave 5 (yellow) would complete a wave C (pink) of wave W (pink) or wave 2 (gray).

The analysis has been done with the indicators and template from the SWAT method simple wave analysis and trading. For more daily technical and wave analysis and updates, sign-up to our newsletter