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GBP/USD - Multiple Time-Frame Analysis

The GBP/USD started the week with a sharp decline from 1.6740 to below 1.6640 as we get into the Monday US session. It seems to have caught some near-term support and may need to resolve the oversold condition seen in the 1H oscillators.

(GBP/USD 1H Chart)

ABC Correction:
In the 4H chart however, you can see that the dip is within the context of consolidation. In this consolidation that started in mid-February, cable has dipped, then traded sideways. The latest dip might start another correctional wave to the downside. Such is an anticipation of an ABC correction.

(GBP/USD 4H Chart)

The 4H chart shows a projection the latest wave, C, if it becomes the same length as the A wave. However, this is only one scenario for a correctional structure. The C wave can easily be longer and thus dip lower. Or wave can still develop a more sideways structure if the current wave holds above 1.66.

Other support factors:
Whether or not the C wave extends or the consolidation develops in another way, we can start to anticipate support when the RSI dips below 30. Since the market in bullish in the longer, medium term, RSI below 30 has been an indication of oversold condition.

Fibo and trendlines:
Also consider monitoring for support in the 61.8% retracement to 50% retracement area. 

(Daily Chart)

Finally, the daily chart shows that the market is still bullish, with a couple of projected trendlines that are intact. These trendlines should be respected for now. 

The daily chart also shows the pattern of the S20-R40 combination. I will be looking forward for these signs before considering buying the GBP/USD.