GBP/USD Eyes Major Downside as Break Below 1.314 Targets 1.249-1.294 Support Zone
The GBP/USD pair has been declining since its August 21 high, and analysts believe it may be nearing the end of this downward trend. The five-wave impulse model suggests that a corrective rally is likely to follow, but traders are advised to wait for confirmation before entering new short positions.
A break below the June 24 low at 1.314 would validate the wave count and align with a double three correction labelled (W)-(X)-(Y). This would shift attention to the Fibonacci extension framework, which targets a support cluster between 1.249 and 1.294.
The Bank of England's cautious stance on monetary policy and slower UK GDP growth have contributed to the pair's decline. Historically, September and October are volatile months for the British Pound, with GBP/USD showing an average trading range of over 350 pips during this period.