GBP/USD – The maximum correction limit

The Pound broke the resistance 1.6509 and successfully reached the first target 1.6572,stopping just a little before the second target 1.6657 (yesterday’s high 1.6645). The importance of this target lies in the fact that it is the falling trendline that combines the last two important tops 1.6870 & 1.6743. With the price getting this close to this line, we can say that it approached the maximum limit for a correction, because breaking this line means that the trend will turn up. But, the price stopped before breaking it, and went back down, leaving behind a 3-way rising correction in the form of a a-b-c zig-zag according to Elliott. And If this scenario turns to be true, we will be heading in the next few days to fresh lows below 1.6270! As for today, the support is at 1.6548, and if broken the current fall will continue and target 1.6487 first, then 1.6378. The resistance is at 1.6608, and breaking it would mean that the cheer for the drop is no longer justified, leaving the price on the way up to target 1.6673 first, and may be 1.6743 later.

Support:
• 1.6548: Fibonacci 38.2% for the short-term.
• 1.6487: Fibonacci 61.8% for the short-term.
• 1.6378: Nov 30th low, a well known previous support.

Resistance:
• 1.6608: Fibonacci 61.8% for the short-term.
• 1.6673: Nov 21st high.
• 1.6743: Nov 25th high.