GBP/USD Elliott Wave: Cable completes five wavesup, watch for a pullback

Gregor Horvat Wavetraders

Some FX majors could stay a bit slow this week, maybe even until next week's Fed decision. EUR/USD, for example, is still testing important resistance around 1.1260 with limited upside for now. But cable stands out, and it looks constructive for more gains after some setback.

Cable came higher as expected, and the reason for this move to the upside was the lower-than-expected unemployment rate in the UK reported yesterday, which dipped to 4.7%. At the same time, inflation is still ticking higher. Today's CPI rose to 3.5% from 3.1%, meaning that the Bank of England could have room for more rate hikes. This could keep GBP/USD in recovery mode.

From an Elliott Wave perspective, on the intraday 1H chart we can already count five waves up from the recent 2026 low, which may be the first leg of a bigger ABC recovery.

Since we already have five waves up, it may not be a bad idea to wait for a three-wave pullback rather than chasing new entries up here. Interesting support could be around the previous wave four area near 1.3300–1.3233. A pullback into that zone could offer a better opportunity for the next leg higher, while 1.3136 remains key invalidation for this recovery idea.

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Author

Gregor Horvat

Wavetraders

Experience Grega is based in Slovenia and has been in the Forex market since 2003.

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