GBP/USD Elliott Wave: Cable finalizing its downtrend

Zorrays Junaid Alchemy Markets

Executive summary

GBP/USD in the final stages of a 2nd wave decline.
Bulls prevail while above 1.3175.
Targets are 1.37 and higher levels over the coming weeks.

Since topping at 1.3589 on April 14, GBP/USD has been grinding sideways to lower in an obvious corrective setback. We anticipate another dip is needed before the bulls are allowed to roam.

GBP/USD Elliott Wave count

The current Elliott wave pattern suggests GBP/USD is nearing the end of a corrective wave (ii). Once complete, GBPUSD would accelerate higher multiple hundred pips in wave (iii).

It appears GBPUSD carved a secondary bottom of 1.3305 last week. It was possible to consider that to be the end of a corrective wave (ii). However, the rally from the June 8 low has been choppy and overlapping, a sign of a corrective rally.

I’m viewing the high yesterday at 1.3461 is wave (y) of ((B)) of z of (ii). This means the current decline this week would be sub-micro wave ((c)) of z of (ii), an ending wave at multiple degrees of trend.

I’m anticipating this decline to develop in 5-waves, either an impulse or diagonal pattern.

A cluster of wave relationships appear between 1.3262 to 1.3286, just below the 1.3305 bottom from last week.

This wave count is valid so long as prices hold above the 1.3175 low from early April. If GBPUSD falls below 1.3175, then this decline is not wave (ii), but some other wave. We would reassess the wave count in the unexpected event of a decline below 1.3175.

Bottom line

GBP/USD appears to be falling in the final stages of a 2nd wave. After this, a strong 3rd wave rally may develop. These tend to be the strongest rallies of the 8-wave Elliott wave sequence. So long as GBP/USD holds above 1.3175, then a rally to 1.37 and higher levels is what the model forecasts. If 1.3175 is broken to the downside, then we’ll reconsider the wave count.

Author

Zorrays Junaid

Alchemy Markets

Zorrays Junaid has extensive combined experience in the financial markets as a portfolio manager and trading coach. More recently, he is an Analyst with Alchemy Markets, and has contributed to DailyFX and Elliott Wave Forecast in the past.

USD/JPY steadies below 160.50 as BoJ's Uchida speaks on outlook

USD/JPY holds its bounce below 160.50 in Europe trading on Tuesday, following the release of the Bank of Japan's monetary policy decision. The BoJ hiked the key rate by 25 bps to 1% as widely, providing little to no impetus to the Japanese Yen. BoJ Deputy Governor Uchida's press conference is doing little to lift the Japanese Yen.

AUD/USD keeps losses near 0.7050 after RBA's expected pause

AUD/ISD is holding moderate losses near 0.7050 in the European session on Tuesday. Traders are assessing the Reserve Bank of Australia's (RBA) expected interest rate hike pause decision and the Governor Bullock's remarks, with the Australian Dollar holding lower ground.

Gold holds gains above $4,300 amid cautious markets

Gold maintains a mildly positive tone, holding gains after rallying about 6.5% over the last few days. The precious metal's recovery, however, has lost steam after crossing the $4,300 line and remains practically flat as the initial enthusiasm about the US-Iran peace deal faded, with investors awaiting details of the agreement and monetary policy decisions by major central banks.

Solana's rebound gains momentum as ETF inflows return

Solana (SOL) steadies at $73 after posting three consecutive green candlesticks since the weekend. The recent recovery is supported by institutional demand, with spot Exchange Traded Funds recording net inflows of $2.81 million on Monday.

Kevin Warsh opens first Fed meeting June 16 with rate hold expected

Kevin Warsh was confirmed by the Senate in a 54-45 vote and sworn in as Federal Reserve Chair on 22 May 2026. The ceremony took place at the White House, with Supreme Court Justice Clarence Thomas administering the oath. The FOMC meeting on 16 and 17 June is his first as chair. The June meeting is also a quarterly projection meeting.

4.2% headline, 0.2% core: Why the Fed's next hike may be targeting the wrong problem

May's CPI put headline inflation at 4.2% on the year, up from 3.8% in April and the hottest reading since April 2023, while core prices rose just 0.2% on the month, undershooting the 0.3% consensus and halving April's pace.