GBP/USD Elliott Wave technical analysis [Video]

GBP/USD Elliott Wave analysis

• Function: Counter-Trend.

• Mode: Corrective.

• Structure: Navy Blue Wave 2.

• Position: Gray Wave 1.

• Next higher degree direction: Navy Blue Wave 3.

• Invalidation level: 1.21000.

Analysis overview:

The daily GBPUSD chart presents a detailed counter-trend view of the current market conditions. This analysis highlights the ongoing Navy Blue Wave 2 correction, which is developing within the context of the larger Gray Wave 1 formation.

Technical indicators suggest that Navy Blue Wave 1 has concluded, and the market is now moving through the corrective stage of Wave 2. This phase indicates a temporary pause in the existing trend before the expected continuation in the direction of Navy Blue Wave 3.

The 1.21000 level is identified as the critical invalidation point. A move below this would disrupt the wave count and suggest a reassessment of the structure is needed.

Market context & strategy implications:

The daily chart allows for a comprehensive view of GBPUSD's placement within the higher degree wave cycle. The correction seen in Navy Blue Wave 2 forms part of the overarching Gray Wave 1 movement.

This setup reinforces the importance of wave degree alignment. Market participants should look for standard corrective patterns—such as ABC three-wave formations or lateral consolidations—common during counter-trend moves.

Trading considerations:

• For short-term traders: Watch for signs of correction completion for entry signals.

• For long-term investors: Monitor this pullback as a potential setup for the next impulsive wave.

• Key risk level: Maintain awareness of the 1.21000 invalidation level.

GBP/USD Elliott Wave analysis

• Function: Counter-Trend.

• Mode: Corrective.

• Structure: Navy Blue Wave 2.

• Position: Gray Wave 1.

• Next higher degree direction: Navy Blue Wave 3.

• Invalidation level: 1.21000.

Analysis overview:

The 4-hour GBPUSD chart reflects a counter-trend outlook, spotlighting a corrective wave structure amid a broader Elliott Wave formation. The current focus is on Navy Blue Wave 2, which forms part of the larger Gray Wave 1 structure.

The earlier Navy Blue Wave 1 appears complete, and the market has transitioned into Navy Blue Wave 2, suggesting a retracement phase before resuming the primary direction. This corrective move is seen as a pause within the prevailing trend.

A breach below 1.21000 would invalidate this wave setup, marking a key level for technical confirmation. The 4-hour time frame provides an effective lens for tracking this correction and assessing the potential transition into Navy Blue Wave 3, expected to be impulsive.

Wave Dynamics & Strategy Implications:
This setup emphasizes the importance of tracking wave degree interactions. Navy Blue Wave 2 serves not only as a near-term structure but also as a component of the broader Gray Wave 1.

Traders should remain alert for typical corrective wave behaviors—such as three-wave formations or lateral consolidation—which are common in counter-trend phases.

Trading insight:

• Short-Term Opportunity: Capitalize on corrective pullbacks within Wave 2

• Long-Term Positioning: Prepare for trend continuation into Wave 3

• Risk Management: Monitor the invalidation level at 1.21000

Analyst: Malik Awais.

GBPUSD Elliott Wave analysis [Video]