Aleksandar Vichev
EWM Interactive
The GBPUSD exchange rate dropped by more than 1100 pips during the last two months. Traders are probably wondering if it is time for a larger correction.
In mid-1930s Ralph Nelson Elliott wrote, that price trends move in waves. He formulated the general postulate of his Wave Principle as follows: five waves in the direction of the larger trend, followed by three waves against it. If you have seen our long-term forecast of GBPUSD, you probably know, that we are highly bearish about it. That is why we expect a downtrend confirmation by this forex pair in the form of a five-wave sequence.
As the chart shows, we suspect that the fifth wave is under construction right now. Fifth waves are never guaranteed, of course, but if this is the correct count, GBPUSD should make a new bottom, probably below 1.60. However, the bears should not get too excited, because, according to the theory, a temporary reversal is likely.
Trading financial instruments entails a great degree of uncertainty and a variety of risks. EMW Interactive’s materials and market analysis are provided for educational purposes only. As such, their main purpose is to illustrate how the Elliott Wave Principle can be applied to predict movements in the financial markets. As a perfectly accurate method for technical analysis does not exist, the Elliott Wave Principle is also not flawless. As a result, the company does not take any responsibility for the potential losses our end-user might incur. Simply, any decision to trade or invest, based on the information from this website, is at your own risk.
Recommended Content
Editors’ Picks
EUR/USD consolidates recovery below 1.0700 amid upbeat mood
EUR/USD is consolidating its recovery but remains below 1.0700 in early Europe on Thursday. The US Dollar holds its corrective decline amid a stabilizing market mood, despite looming Middle East geopolitical risks. Speeches from ECB and Fed officials remain on tap.
GBP/USD advances toward 1.2500 on weaker US Dollar
GBP/USD is extending recovery gains toward 1.2500 in the European morning on Thursday. The pair stays supported by a sustained US Dollar weakness alongside the US Treasury bond yields. Risk appetite also underpins the higher-yielding currency pair. ahead of mid-tier US data and Fedspeak.
Gold appears a ‘buy-the-dips’ trade on simmering Israel-Iran tensions
Gold price attempts another run to reclaim $2,400 amid looming geopolitical risks. US Dollar pulls back with Treasury yields despite hawkish Fedspeak, as risk appetite returns.
Manta Network price braces for volatility as $44 million worth of MANTA is due to flood markets
Manta Network price is defending support at $1.80 as multiple technical indicators flash bearish. 21.67 million MANTA tokens worth $44 million are due to flood markets in a cliff unlock on Thursday.
Have we seen the extent of the Fed rate repricing?
Markets have been mostly consolidating recent moves into Thursday. We’ve seen some profit taking on Dollar longs and renewed demand for US equities into the dip. Whether or not this holds up is a completely different story.