GBP/USD Price Analysis: Could this be the start of a move lower?

• GBP/USD trades just under flat after being much lower for most of the session.
• The price wave looks like it may reject the 76.4% Fibonacci retracement. 

GBP/USD 1-hour chart

GBP/USD has spent most of the session in the red but recovered from the low of 1.2643 to trade at 1.2730 at the time of writing. It was yesterdays UK press reports that the UK Government is considering abandoning Brexit talks that sent the pair lower. Since the EU session opened up the greenback selling kicked in and cable pulled right back up. 

Looking closer at the chart, there is now a potential reversal situation. Elliott Wave and Dow analysts look at the first lower high as an important step. The wave 1-2 could be setting up as the pair rejected the 76.4% retracement. The only way this could be confirmed is if the wave low at the red support zone gets broken to the downside. If the wave high of 1.2767 gets broken then the theory would be invalid. 

GBP is one of the underperformers against the dollar on Wednesday. EUR, CAD and NZD are the outperformers and the pound is pretty weak against the bunch. Looking at the indicators, the Relative Strength Index is looking positive above the 50 area. The MACD is also looking positive as the histogram is in the green and the signal lines are above the mid-zone. 

Looking at the structure of the chart, the trend it is not as clear as EUR/USD. The main resistance zone at 1.2813 as not been taken out so the price has not yet made higher high higher low waves. Although the pair has made great strides the uptrend cannot be confirmed till the aforementioned resistance is broken. 

Additional levels