GBPUSD has reached our minimum pull back target of 1.29 and is now bouncing as per our expectations. The most probable wave scenario implies that we are still in a corrective phase and another leg lower should follow.

GBPUSD has pulled back towards the 38% Fibonacci retracement level as we expected from our analysis back on December 17th. 1.29 was our minimum pull back target area and GBPUSD reached as low as 1.2904. As shown by the chart above, our expectation was to see price bounce from 1.29 area towards 1.31-1.32. The most probable wave scenario is that so far price has completed wave A of the corrective pull back and is now in wave B. A wave C lower towards the 61.8% Fibonacci retracement should follow. But markets are not perfect as to follow the theory according to textbooks, so take this scenario under serious consideration but we are also open to other possibilities. It is important to see the short-term wave structure of this upward move in order to define how much more upside this current move has to give.