GBPUSD (H4) — The Correction Isn't Over Yet

Wave Count

The structure since the Primary [C] low at 1.2980 (Oct 2025) is straightforward once the higher degree is separated from the noise:

• Primary [W]: 1.2980 → 1.3860 (Jan 2026) — a completed advance off the October low.
• Primary [X] (in progress since Jan 2026) — a broad, seven-month double-three correction:
  • Intermediate (A): 1.3860 → 1.3130 (Mar low)
  • Intermediate (B): 1.3130 → 1.3650 (Apr high)
  • Intermediate (C) / Wave (Y): 1.3650 → 1.3110 (Jun low), rejected again at 1.3550 (Jul high), now pressing back down toward the range floor.

In short: Sterling has been chopping inside a 1.3110–1.3650 box for half a year, and the latest rejection from 1.3550 puts price back on the downside leg of that range, not on a fresh breakout.

Primary Scenario — Bearish (favored)

Wave (Y) of Primary [X] is still unfolding lower. A measured-move equality with wave (W) (1.3860→1.3130) projected from the 1.3650 high points to roughly 1.2920–1.2980 — right on top of the original October low, which is the classic "Y = W" resolution for a double-three.

Confirms if: price stays capped below 1.3550 and breaks 1.3110. Invalidated if: price closes back above 1.3660, which would hand control to the alternate count below.

Trade Plan (Primary Count)

Direction

SELL

Aggressive entry: 1.3300 (market)

Preferred entry: 1.3400–1.3450 bounce into broken support / 38–50% retrace of the 1.3110→1.3550 leg, entered last week already.

Stop loss: 1.3660, above the (B)/(X) swing high — invalidates the count

Target 1: 1.3130, Mar/Jun range support

Target 2: 1.2980, Oct low, Y≈W equality target

R:R from 1.3425 entry: ~1.4:1 to T1, ~2:1 to T2. Move stop to breakeven once T1 is tagged; scale out and hold the rest for T2.

Alternate Scenario — Bullish

If 1.3110–1.2980 holds and price reclaims 1.3660, treat Primary [X] as complete. That would open the door to a resumption of the longer-term uptrend, targeting new highs above 1.3860.

Cheers!