Analyzing the wave 4 correction on the GBPAUD 4H chart. Exploring the 1.95179 resistance and the 1.86970 downside target for the final impulse.
As volatility returns to the forex markets, GBPAUD continues to exhibit a structure highly consistent with Elliott Wave principles. Following the prolonged wave 3 downtrend, the current corrective bounce has raised questions about a potential trend reversal. However, our technical data suggests this is a textbook corrective phase before the final leg down.
Elliott Wave Analysis: The 4-hour chart highlights that after completing its major 3rd wave, the pair entered a wave 4 corrective phase. We are observing price action gravitating toward the 0.382 Fibonacci retracement level at 1.95179.
We are tracking two primary paths:
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Immediate Decline (Alternative-1): The corrective structure may have already peaked. In this scenario, the impulsive move toward 1.86970 (Wave 5) is already gaining momentum.
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Extended Correction (Alternative-2): Price reaches up to tap the 1.95179 resistance directly before a decisive rejection triggers the final wave 5 drop.
Key Levels to Watch:
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Resistance: 1.95179 (Crucial for invalidating the current bearish count).
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Target: 1.86970 (1:1 extension and wave 5 psychological support).
Conclusion: The technical outlook for GBPAUD remains bearish for the medium term. As long as the price stays below the 1.9520 threshold, we expect a continuation of the downtrend toward the 1.86970 region to complete the cycle.